S-1/A 1 p70803a2sv1za.htm AMENDMENT NO. 2 TO FORM S-1 AMENDMENT NO. 2 TO FORM S-1
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As filed with the Securities and Exchange Commission on September 20, 2005
Registration No. 333-126226
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
US AIRWAYS GROUP, INC.
(Exact name of registrant as specified in its charter)
         
DELAWARE   4512   54-1194634
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer Identification No.)
 
2345 Crystal Drive
Arlington, Virginia 22227
Telephone: (703) 872-7000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)
 
Elizabeth K. Lanier, Esq.
Executive Vice President — Corporate Affairs and General Counsel
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
             
Kevin J. Lavin, Esq.
Brian P. Leitch, Esq.
Arnold & Porter llp
555 Twelfth Street, NW
Washington, DC 20004
Tel. No.: (202) 942-5000
Fax No.: (202) 942-5999
  James E. Walsh III, Esq.
America West Holdings
Corporation
111 West Rio Salado Parkway
Tempe, AZ 85281
Tel. No.: (480) 693-0800
Fax No.: (480) 693-5155
  Peter C. Krupp, Esq.
Timothy R. Pohl, Esq.
Skadden, Arps, Slate,
Meagher & Flom llp
333 West Wacker Drive
Chicago, IL 60606-1285
Tel. No.: (312) 407-0700
Fax No.: (312) 407-0411
  Stephen A. Greene, Esq.
Cahill Gordon & Reindel llp
80 Pine Street
New York, NY 10005
Tel. No.: (212) 701-3000
Fax No.: (212) 269-5420
 
 
     Approximate date of commencement of proposed sale to the public: As soon as practicable after the date of this Registration Statement.
     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box.    o
     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o
     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o
     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o
     If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o
CALCULATION OF REGISTRATION FEE
                         
                         
                         
            Proposed Maximum     Proposed Maximum      
Title of Each Class of     Amount to be     Offering     Aggregate     Amount of
Securities to be Registered     Registered     Price Per Share(1)     Offering Price     Registration Fee
                         
Common Stock, $0.01 par value
    9,775,000     $17.646     $172,500,000 (2)     $20,303(3)
                         
                         
(1)  Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act.
(2)  The proposed maximum aggregate offering price has been rounded.
(3)  The registrant is offering 9,775,000 shares of common stock with a proposed maximum aggregate offering price of $172,500,000 pursuant to this registration statement. The registrant previously paid a filing fee in the amount of $17,655 in connection with the registration of 9,090,909 of such shares with a proposed maximum aggregate offering price of $149,999,998.50 pursuant to a Registration Statement on Form S-1 filed June 29, 2005 (file no. 333-126226). The registrant is offering an additional 684,091 shares of common stock with an additional $22,500,001.50 of proposed maximum aggregate offering price under this registration statement and is currently paying an additional fee of $2,648 in connection with these shares.
 
     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated September 20, 2005
PROSPECTUS
8,500,000 Shares
US AIRWAYS GROUP, INC.
Common Stock
        US Airways Group, Inc. is selling all of the shares.
      Our shares are listed on The New York Stock Exchange under the symbol “LCC.” The last reported sale price on September      , 2005 was $           per share.
      Concurrent with this offering, we are offering $          of convertible notes ($          if the initial purchaser’s option to purchase additional notes is exercised) in a separate private offering to qualified institutional buyers. Neither offering is contingent on the other.
       Investing in our common stock involves risks that are described in the “Risk Factors” section beginning on page 16 of this prospectus.
 
                 
    Per Share   Total
         
Public offering price
  $       $    
 
Underwriting discount
  $       $    
 
Proceeds, before expenses, to US Airways Group, Inc. 
  $       $    
      The underwriters may also purchase up to an additional 1,275,000 shares from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover overallotments.
      Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
      The shares will be ready for delivery on or about                     , 2005.
      This offering will occur after the closing of certain transactions contemplated thereby, including (i) the closing of the merger between US Airways Group, Inc. and America West Holdings Corporation, and (ii) the funding of $565 million of new equity investments in US Airways Group, Inc. following the merger.
 
Merrill Lynch & Co.
Sole Book-Running Manager
Citigroup
 
The date of this prospectus is                     , 2005


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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
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Annexes        
         
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      B-1  
      B-2  
 EX-5.1: OPINION OF JANET L DHILLON
 EX-23.1: CONSENT OF KPMG LLP
 EX-23.2: CONSENT OF KPMG LLP
 EX-23.3: CONSENT OF PRICEWATERHOUSECOOPERS LLP
 EX-99.1: FORM OF STOCKHOLDERS AGREEMENT
 EX-99.3: CONSENT OF DIRECTOR NOMINEE: J. STEVEN WHISLER
 EX-99.4: CONSENT OF DIRECTOR NOMINEE: RICHARD BARTLETT
 EX-99.5: CONSENT OF DIRECTOR NOMINEE: EDARD SHAPIRO
 EX-99.6: CONSENT OF DIRECTOR NOMINEE: GEORGE M. PHILIP
 EX-99.7: CONSENT OF DIRECTOR NOMINEE: W. DOUGLAS PARKER
 EX-99.8: CONSENT OF DIRECTOR NOMINEE: HERBERT M. BAUM
 EX-99.9: CONSENT OF DIRECTOR NOMINEE: RICHARD C. KRAEMER
 EX-99.10: CONSENT OF DIRECTOR NOMINEE: DENISE M. O'LEARY
 EX-99.11: CONSENT OF DIRECTOR NOMINEE: RICHARD P. SCHIFTER
 EX-99.12: CONSENT OF DIRECTOR NOMINEE: CHERYL G. KRONGARD
 EX-99.13: CONSENT OF DIRECTOR NOMINEE: BRUCE R. LAKEFIELD
 EX-99.14: CONSENT OF DIRECTOR NOMINEE: HANS MIRKA
 EX-99.15: CONSENT OF DIRECTOR NOMINEE: ROBERT MILTON


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      You should rely only on the information contained in this prospectus for purposes of your decision to purchase these securities. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it for purposes of your decision to purchase these securities. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US AIRWAYS GROUP
AND AMERICA WEST HOLDINGS
      The primary part of this document, which forms part of a registration statement on Form S-1 filed with the Securities and Exchange Commission, or SEC, by US Airways Group, constitutes a prospectus of US Airways Group under Section 5 of the Securities Act of 1933, as amended, with respect to the shares of New US Airways Group common stock to be issued in connection with this offering. The prospectus contains information about this offering and the combined company after completion of the plan of reorganization and the merger transaction with America West Holdings Corporation. In addition, we have included historical information regarding US Airways Group and America West Holdings that is contained in their respective filings with the SEC on Forms 10-K and 10-Q that are attached as annexes to this prospectus. The registration statement contains more information than this prospectus regarding US Airways Group and its common stock, including certain exhibits. You can obtain a copy of the registration statement from the SEC at the address listed below or from the SEC’s website.
      US Airways Group, US Airways, Inc., America West Holdings and America West Airlines, Inc. file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy these reports, statements or other information at the SEC’s Public Reference Room at Room 1580, 100 F Street NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC filings of US Airways Group, US Airways, Inc., America West Holdings and America West Airlines, Inc. are also available to the public from commercial document retrieval services and at the website maintained by the SEC at www.sec.gov. You can also find the SEC filings of US Airways Group on its website, www.usairways.com, and of America West Holdings on its website, www.americawest.com. Information included on the identified websites is not incorporated by reference in this prospectus. Documents of US Airways Group, US Airways, Inc., America West Holdings and America West Airlines, Inc. are also available from US Airways Group and America West Holdings, respectively, without charge, excluding any exhibits to those documents that are not specifically incorporated by reference as an exhibit in this prospectus. You may request a copy of these documents in writing or by telephone by contacting the companies at:
     
US Airways Group, Inc.
  America West Holdings Corporation
2345 Crystal Drive
  111 West Rio Salado Parkway
Arlington, Virginia 22227
  Tempe, Arizona 85281
Telephone number: (703) 872-7000
  Telephone number: (480) 693-0800
Attn: Investor Relations
  Attn: Investor Relations
      In addition, for information regarding US Airways Group’s bankruptcy proceedings, you may access filings made in the proceedings, including the plan of reorganization and disclosure statement filed by US Airways Group and its domestic subsidiaries in those proceedings, at www.donlinrecano.com. Information on this website is not incorporated by reference in this prospectus.

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SUMMARY
      The following is a summary that highlights information contained in this prospectus. This summary may not contain all of the information that may be important to you. For a more complete description of this offering and the merger, as well as the plan of reorganization of US Airways Group and its domestic subsidiaries, we encourage you to read carefully this entire prospectus. In addition, we encourage you to read documents of US Airways Group and America West Holdings that have been filed with the SEC, and the companies’ respective Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q attached to this prospectus. These documents include important business and financial information about US Airways Group and America West Holdings. Unless we specify otherwise, all references in this prospectus to “New US Airways Group,” the “combined company”, “our company”, “we” and “us” refer to US Airways Group, Inc. following effectiveness of the plan of reorganization of US Airways Group and its domestic subsidiaries and the merger with America West Holdings. Unless we specify otherwise, all references in this prospectus to “US Airways Group” refer to US Airways Group, Inc. prior to the effectiveness of the merger, all references in this prospectus to “America West Holdings” refer to America West Holdings Corporation.
      On September 16, 2005, the bankruptcy court entered an order confirming the debtors’ plan of reorganization. This prospectus assumes that certain events have occurred, including (i) the closing of the merger between US Airways Group and America West Holdings, and (ii) the funding of $565 million of new equity investments in New US Airways Group following the merger. This offering will occur only after these events have taken place.
      Unless otherwise indicated, all information in this prospectus assumes that the underwriters’ overallotment option to purchase up to an additional 1,275,000 shares from us will not be exercised.
New US Airways Group
111 West Rio Salado Parkway
Tempe, Arizona 85281
Telephone number: (480) 693-0800
      US Airways Group, Inc., a Delaware corporation, is a holding company formed in 1983 whose origins trace back to the formation of All American Aviation in 1937. US Airways Group’s primary business activity is the operation of a major network air carrier through its ownership of the common stock of US Airways, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., Material Services Company, Inc. and Airways Assurance Limited. US Airways, Inc., along with US Airways Group’s regional airline subsidiaries and affiliated carriers flying as US Airways Express, is a hub-and-spoke carrier with a substantial presence in the Eastern United States and with service to Canada, the Caribbean, Latin America and Europe. US Airways, Inc. had approximately 42 million passengers boarding its planes in 2004 and is the seventh largest U.S. air carrier based on available seat miles, or ASMs. As of June 30, 2005, US Airways, Inc. operated 268 jet aircraft and 25 regional jet aircraft and provided regularly scheduled service at 101 airports in the continental United States, Canada, the Caribbean, Latin America and Europe. As of June 30, 2005, the US Airways Express network served 133 airports in the United States, Canada and the Bahamas, including approximately 51 airports also served by US Airways, Inc. During 2004, US Airways Express air carriers had approximately 15.2 million passengers boarding their planes.
      On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc. and Material Services Company, Inc., which account for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States bankruptcy court for the Eastern District of Virginia, Alexandria Division. US Airways Group and its domestic subsidiaries are sometimes referred to in this prospectus as the “debtors” because that is a common term for companies in bankruptcy.
      America West Holdings Corporation, a Delaware corporation formed in 1996, is a holding company that owns all of the stock of America West Airlines, Inc., a Delaware corporation formed in 1981. America West

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Airlines, Inc. accounted for most of America West Holdings’ revenues and expenses in 2004. Based on 2004 operating revenues and ASMs, America West Airlines, Inc. is the eighth largest passenger airline and the second largest low-cost carrier in the United States. America West Airlines, Inc. is the largest low-cost carrier that operates a hub-and-spoke network, with large hubs in both Phoenix, Arizona and Las Vegas, Nevada. As of June 30, 2005, America West Airlines, Inc. operated a fleet of 143 aircraft with an average age of 10.9 years and served 63 destinations in North America, including eight in Mexico, three in Canada and one in Costa Rica. Through regional alliance and code share arrangements with other airlines, America West Airlines, Inc. served an additional 52 destinations in North America. In 2004, America West Airlines, Inc. had approximately 21.1 million passengers boarding its planes and generated revenues of approximately $2.3 billion.
      On May 19, 2005 US Airways Group signed a merger agreement with America West Holdings pursuant to which America West Holdings would merge with a wholly owned subsidiary of US Airways Group. The merger agreement was amended by a letter agreement on July 7, 2005. On the date of this prospectus the merger became effective and US Airways Group emerged from bankruptcy.
      New US Airways Group will operate under the single brand name of US Airways through two principal operating subsidiaries, US Airways, Inc. and America West Airlines, Inc. We expect to integrate the two operating subsidiaries into one operation over the following 24 months. As a result of the merger, we expect to be the fifth largest airline operating in the United States as measured by domestic revenue passenger miles and by ASMs. We expect to have primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Pittsburgh, Las Vegas, New York, Washington, D.C. and Boston. New US Airways Group will be a low-cost carrier offering scheduled passenger service on approximately 3,600 flights daily to 229 cities in the U.S., Canada, the Caribbean, Latin America and Europe. We will operate 360 mainline jets and will be supported by our regional airline subsidiaries and affiliates operating as US Airways Express, which will operate approximately 241 regional jets, of which 80 will be aircraft with 70 or more seats, and approximately 112 turboprops.
      We expect to have one of the most competitive cost structures in the airline industry due to cost cutting measures initiated by both companies over the last three years. US Airways Group’s restructuring activities in the debtors’ Chapter 11 bankruptcy proceedings specifically targeted cost reductions in four main areas. First, it has achieved important reductions in labor, pension and benefit costs resulting in ratified collective bargaining agreements, representing over $2 billion of annual cost savings. Second, it has put restructuring initiatives in place to reduce overhead, including reducing management payroll, and has re-vamped its schedule to improve aircraft utilization. Third, it has renegotiated various contractual obligations resulting in lower costs, including those related to aircraft, real estate and suppliers, and lowered catering costs. Lastly, US Airways Group rationalized its fleet through the elimination of older, less efficient aircraft, the introduction of large regional jet aircraft with low trip costs to better match capacity with demand, and the reduction of the number of mainline aircraft types it operates in order to lower maintenance, inventory and pilot training costs.
      Separately, America West Holdings has also been able to greatly reduce its operating expenses as a percentage of revenues since 2002. America West Holdings instituted programs to reduce management payroll, clerical payroll, travel agency based commissions, incentive programs and override commissions. It has reduced capital expenditures and discretionary expenses, and lowered catering costs. Other initiatives include increasing point-to-point flying at minimal additional costs using aircraft that would otherwise be parked at a gate, which increases daily utilization of aircraft.
      In addition to the cost saving initiatives already undertaken at the individual companies, we believe the combination of America West Holdings and US Airways Group will result in significant annual revenue and cost synergies of approximately $600 million that would be unachievable without completing the merger. These synergies derive from three principal sources. In anticipation of the merger, US Airways Group negotiated a reduction in its existing fleet so that the fleet of the combined company suits the expected network. New US Airways Group will be able to schedule the combined fleet to better match aircraft size

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with consumer demand. By scheduling the reduced fleet more efficiently and by adding new, low-fare service to Hawaii, we expect to create approximately $175 million in annual operating synergies. We also expect to realize annual cost synergies of approximately $250 million by reducing administrative overhead, consolidating our information technology systems and combining facilities. Lastly, by becoming one nationwide, low-cost carrier with a global reach that provides more choice for consumers and an improved ability to connect, we expect to realize approximately $175 million in additional annual revenue. There can be no assurance that we will be able to achieve these revenue, operating and cost synergies or that they can be achieved in a timely manner.
      US Airways Group and its subsidiaries prior to the merger employed approximately 29,400 people, and America West Holdings and its subsidiaries prior to the merger employed approximately 14,000 people. After seniority lists have been integrated for each of the combined airlines’ unionized labor groups, we anticipate that a single labor contract will be applied to each of those groups.
      The combined airline is expected to operate a mainline fleet of 360 planes (supported by approximately 241 regional jets and approximately 112 turboprops that provide passenger feed into the mainline system), down from a total of 411 mainline aircraft operated by the two airlines as of June 30, 2005. US Airways Group projects removing an additional 47 aircraft by the end of 2006. The combined airline is also expected to take delivery by the end of February 2006 of seven Airbus A320 family aircraft previously ordered by America West Airlines, Inc. Airbus has also agreed to reconfirm 30 narrow body A320-family aircraft deliveries and reschedule those deliveries from the 2006 to 2008 period to the 2009 to 2010 period. To rationalize international flying, the merged company anticipates working with Airbus to begin transitioning to an all-Airbus widebody fleet of A350 aircraft in 2011.
      We believe the merger will create one of the industry’s most financially stable airlines with approximately $1.5 billion in new liquidity coming from equity investments, this offering, new cash infusions from commercial partners, asset sales and the release of currently restricted cash.
      The $565 million of new equity investments has been provided by several investors. This offering will provide up to an additional $150 million of equity financing, or up to $172.5 million if the underwriters’ overallotment option is exercised in full, excluding the underwriters’ discount. In addition, the merged company is expected to receive over $700 million of cash infusions from commercial partners, including approximately $455 million from an affinity credit card partner and a $250 million line of credit to be provided by Airbus, and approximately $100 million from asset-based financings or sales of aircraft, net after prepayments of US Airways, Inc.’s loan partially guaranteed by the ATSB.
      For more information on these matters, see the sections entitled “The Plan of Reorganization” and “The New Equity Investments” and “Unaudited Pro Forma Condensed Combined Financial Statements.”
Competitive Strengths of the Combined Company
      We believe that we will have a number of competitive strengths as a combined company, including:
      Largest U.S. Low-Cost Carrier with Nationwide Route Network. We expect to be the first national full-service low-cost carrier and the largest low-cost carrier by revenue passenger miles (including international service). We anticipate being the fifth largest airline operating in the United States as measured by domestic revenue passenger miles and by ASMs, with a national hub-and-spoke route network that will provide our customers with nationwide reach. We believe New US Airways Group will capture approximately 10% of all domestic revenue passenger miles. The combined company plans to continue as a member of the Star Alliance, the world’s largest airline alliance group.
      With our simplified pricing structure and international scope, we will offer competitive fare service to approximately 229 cities in the United States, Canada, the Caribbean, Latin America and Europe, making us the only low-cost carrier with a significant international route presence. Starting in December 2005, we expect to expand our route network to include Hawaii. We will be the only low-cost carrier with an

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established East Coast route network, including the US Airways Shuttle service, with substantial presence at capacity constrained airports like New York’s LaGuardia Airport and Washington, D.C.’s Ronald Reagan Washington National Airport.
      Offer Services Not Typical of Low-Cost Carriers. We believe that by delivering high-quality service, with greater frequency of flight departures and by offering our customers premium amenities not available on other low-cost carriers, we will provide the best value in our markets and create increased demand for our air travel services. We expect to be the only national low-cost carrier offering a global frequent flyer program, assigned seating, a First Class cabin, the US Airways Shuttle, online service to approximately 44 international destinations, convenient access to over 700 global destinations through our membership in the Star Alliance, and the convenience of our airport clubs. We expect that these amenities will differentiate our service from other low-cost carriers and will allow us to strengthen customer loyalty and attract new air travelers. We believe that our customers will continue to value our full service amenities and flight frequency, and that will help us to compete effectively with other low-cost carriers by providing our business oriented passengers with a premium product at a competitive price.
      Competitive Low-Cost Structure. We believe that the cost saving initiatives of both companies discussed above, coupled with the significant cost synergies from the combination, will allow us to have one of the most competitive cost structures in the airline industry. On a pro forma basis, once the anticipated merger synergies are realized, we expect that our costs, on a unit basis, will be approximately the same as those of America West Holdings before the merger. We believe that we will be able to compete effectively and profitably with this cost structure.
      Improved Balance Sheet with Substantial New Liquidity. We believe that we will be one of the industry’s most financially stable airlines. We expect New US Airways Group to realize approximately $10 billion in annual revenues and have as of the completion of the merger a strong balance sheet. The combined balance sheets will benefit from new liquidity of approximately $1.5 billion, which will include equity investments aggregating $565 million, the proceeds raised through this offering of approximately $150 million, or up to $172.5 million if the underwriters’ overallotment option is exercised in full, excluding the underwriters’ discount, cash infusions from commercial partners and other initiatives.
      Experienced Management Team. We benefit from an experienced, highly motivated combined management team. Our team is led by W. Douglas Parker, who has been the chief executive officer of America West Holdings since 2001 and prior to that served as chief operating officer from 2000 to 2001 and chief financial officer from 1995 to 2000. As chief executive officer, Mr. Parker led America West Holdings’ transformation into a low-cost carrier.
Business Strategy
      Our business strategy consists of the following:
      Provide Excellent Value to Our Customers. We plan to standardize customer service initiatives system-wide and provide a competitive, simplified pricing structure that we believe will provide our customers with an excellent value when compared to other low-cost carriers as well as legacy mainline carriers. We are committed to building a successful airline by taking care of our customers. We believe that our focus on excellent customer service in every aspect of operations, including personnel, flight equipment, in-flight and ancillary amenities, on-time performance, flight completion ratios and baggage handling, will strengthen customer loyalty, provide excellent value to our customers and attract new customers. Further, we believe that the amenities we provide our customers, such as a frequent flyer program, airport clubs, assigned seating and a First Class cabin, differentiates our product offering from other low-cost carriers.
      Continue to Reduce Our Operating Costs. New US Airways Group will focus on achieving cost reduction synergies that it expects to realize from the merger. Key areas where cost reductions can be achieved as a result of the merger include overhead costs, in-sourcing of information technology solutions where America West Holdings has existing capabilities, airport savings through better use of gates and

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employees in airports that both America West Holdings and US Airways Group serve today, and eliminating redundant facilities such as office space and hangars. We currently expect these initiatives to achieve approximately $250 million in annual savings once fully implemented. In addition, we also plan to increase aircraft use to increase flying and reduce unit costs.
      Leverage Our Broader Route Network and Rationalize Our Fleet. We expect to achieve annual savings of approximately $175 million from rationalizing our fleet, rescheduling our operations, and adding new, low-fare service to Hawaii. As a result of the merger, New US Airways Group plans to combine the current regional strengths of both America West Holdings on the West Coast and US Airways Group on the East Coast to provide a comprehensive product offering more attractive to customers. We also plan to make more efficient use of our nationwide network as a combined entity. New US Airways Group will be able to coordinate the schedules to and from the hubs and secondary hubs/focus cities of both airlines to create a significantly greater number of flight connections across the route network. Similarly, we believe that we will be able to optimize the utilization of our aircraft and employees. For instance, aircraft of one airline that, before the merger, would have to sit idle awaiting the next scheduled departure could now be utilized along existing routes of the other airline to increase daily utilization.
      In anticipation of the merger, US Airways Group negotiated a reduction to its existing fleet so that the fleet of the combined company suits the expected route network and so that the introduction of new aircraft will be timed to coincide with the expiration of existing aircraft leases. We believe that we will also be able to reschedule the combined fleet to better match aircraft size with consumer demand. For example, in some markets that US Airways Group currently serves with a Boeing 737 aircraft, we expect to replace that service with a 90-seat regional jet that is currently operated in the America West Holdings system. In addition, we expect to place America West Holdings new aircraft into service on flights out of current US Airways Group hubs. Furthermore, we plan to initiate Boeing 757 aircraft service to Hawaii, which neither of us currently serves. These changes are expected to generate revenue benefits of approximately $175 million.
      Prudent Integration of America West Airlines, Inc. and US Airways, Inc. Operations. While management will move quickly to try to provide a seamless integration for consumers, we currently expect to achieve full labor and operational integration of America West Airlines, Inc. and US Airways, Inc. over a period estimated to be approximately 24 months. We believe that this timeframe will allow us to resolve the critical labor and systems issues necessary to achieve full integration. We plan to operate under a single brand name of US Airways while maintaining separate operating certificates for this period. We believe that the majority of the synergy value can be realized quickly through the rapid integration of routes, schedules, pricing, other marketing initiatives and overhead reductions.
Management (see page 39)
      The board of directors of New US Airways Group consists of 13 members. W. Douglas Parker, the Chairman and Chief Executive Officer of America West Holdings, serves as Chairman and Chief Executive Officer of New US Airways Group. Bruce Lakefield, the former President and Chief Executive Officer of US Airways Group and US Airways, Inc., serves as Vice Chairman of New US Airways Group. In addition, Herbert M. Baum, Richard C. Kraemer, Denise M. O’Leary, Richard P. Schifter and J. Steven Whisler were nominated by America West Holdings (all of whom are independent), Cheryl G. Krongard, Hans Mirka and George M. Philip were nominated by US Airways Group (all of whom are independent), Robert A. Milton was nominated by ACE Aviation Holdings Inc., Edward L. Shapiro was nominated by Par Investment Partners, L.P. and Richard A. Bartlett was nominated by Eastshore Aviation, LLC.
      Messrs. Milton, Shapiro and Bartlett are expected to be appointed to the board of directors two business days following the date of the merger, in accordance with the stockholders agreement that was entered into among the equity investors and New US Airways Group in connection with the closing of the merger. All other directors became members of the board of directors immediately upon the effectiveness of the merger.
      See the section entitled “Management” for a list of our current officers and directors.

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The Debtors’ Plan of Reorganization (see page 86)
      Under the plan of reorganization developed by the debtors, which was confirmed by the bankruptcy court on September 16, 2005, the following events occurred on the effective date of the plan of reorganization and the merger (percentages below are based on certain assumptions contained in the section entitled “Capitalization” and reflect the impact of certain securities that are dilutive at the per share purchase price paid by the equity investors):
  •   America West Holdings merged with Barbell Acquisition Corp., which was created as a wholly owned subsidiary of US Airways Group on May 12, 2005, and as a result itself became a wholly owned subsidiary of New US Airways Group;
 
  •   The new equity investors ACE Aviation Holdings Inc., or ACE; Par Investment Partners, L.P., or Par; Peninsula Investment Partners, L.P., or Peninsula; a group of investors under the management of Wellington Management Company, LLP, or Wellington; Tudor Proprietary Trading, L.L.C. and certain investors advised by Tudor Investment Corp., or Tudor; and Eastshore Aviation, LLC, or Eastshore; invested $565 million in consideration for the issuance of approximately 36.5 million shares of New US Airways Group common stock, representing approximately 46% of New US Airways Group common stock outstanding as of the completion of the merger, excluding any shares that may be issued pursuant to the options granted to the new equity investors, all of which is more fully described in the section entitled “The New Equity Investments.”
 
  •   The general unsecured creditors, as their claims are allowed, including the Pension Benefit Guaranty Corporation, or the PBGC, and the Air Line Pilots Association, or ALPA, will receive approximately 8.2 million shares of New US Airways Group common stock, representing approximately 10% of New US Airways Group common stock outstanding as of the completion of the merger. In addition, the Air Line Pilots Association will receive options to purchase up to an additional 1.1 million shares of New US Airways Group common stock;
 
  •   Under certain agreements among General Electric and certain of its affiliates, or GE, and US Airways Group, GE agreed, in consideration for the early return of 51 aircraft and six engines, the assumption of certain modified leases and the payment of $125 million in cash by September 30, 2005, (1) to retire an existing bridge loan facility, (2) to complete a purchase by GE of 21 aircraft and 28 engines with a simultaneous lease back of the equipment to US Airways, Inc. at market rates, (3) to allow US Airways Group to draw additional amounts under an existing credit facility, which will result in a total principal outstanding balance thereunder of approximately $28 million, (4) to restructure lease obligations of US Airways, Inc. relating to 59 aircraft to market rates, (5) to provide financing for current and growth aircraft, (6) to grant concessions regarding return condition obligations with respect to the return of aircraft and engines, and (7) to waive penalties for the removal of engines currently under GE engine maintenance agreements;
 
  •   In consideration of (i) the assumption by US Airways Group of certain purchase agreements between US Airways Group and AVSA, S.A.R.L., an affiliate of Airbus Industrie G.I.E., referred to as Airbus, and (ii) the entry into certain new agreements between New US Airways Group, America West Holdings and Airbus, which provide for (1) the purchase by US Airways Group and America West Holdings of up to 20 new A350 airplanes from Airbus, (2) the ability to convert orders for up to ten of the A350 aircraft to orders for A330 aircraft, (3) the ability to cancel up to ten of the A330 aircraft previously ordered upon the payment of certain predelivery payments for A350 aircraft, and (4) changes in the delivery schedule for existing orders of narrow-body aircraft, Airbus provided New US Airways Group a $250 million line of credit to be used by New US Airways Group, of which $213 million can be used for general corporate purposes, together with additional backstop financing for the purchase of the A350 aircraft; and
 
  Affiliates of ACE entered into a series of agreements with New US Airways Group, including maintenance and airport handling agreements.

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      In addition, the plan of reorganization provides for the satisfaction of certain secured and unsecured prepetition claims against the debtors. These include claims related to the debtors’ assumption or rejection of various contracts and unexpired leases, the assumption of debtors’ existing collective bargaining agreements with their unions and the termination of certain employee benefit plans with employees and retirees, and other matters. The plan of reorganization also provides for the satisfaction of allowed administrative claims, which consist primarily of the costs and expenses of administration of the Chapter 11 cases, including the costs of operating the debtors’ businesses since filing for bankruptcy. The bankruptcy court set August 22, 2005 as the bar date by which creditors asserting administrative claims, other than administrative claims arising in the ordinary course of business, were required to be filed. The debtors received a large number of administrative claims in response to this bar date, for timely filed claims as well as additional claims that were late filed without permission of the bankruptcy court. Included in these claims, however, are claims for amounts arising in the ordinary course that have either already been paid, or that are included in the debtors’ business plan and budget to be paid in the ordinary course. Also included are claims that are duplicative, claims for which the debtors believe there is no legal merit for a claim of any status, and claims that the debtors believe may be valid as unsecured claims but are not entitled to administrative claims status. Accordingly, the debtors believe that only a very small portion of the claims filed in response to the bar date for non-ordinary course administrative expense claims will actually be allowed in amounts exceeding the ordinary course expenditures already contained in the debtors’ business plan. However, we cannot assure you that the aggregate amount of the claims ultimately allowed will not be material. To the extent any of these claims are allowed, they will generally be satisfied in full.
      The ultimate resolution of certain of the claims asserted against the debtors in the Chapter 11 cases will be subject to negotiations, elections and bankruptcy court procedures that will occur after the date of this prospectus. While a significant amount of the debtors’ liabilities were extinguished as a result of the discharge granted upon confirmation of the plan of reorganization, not all of the debtors’ liabilities were subject to discharge. The types of obligations that the debtors remain responsible for include those relating to their secured financings, aircraft financings, certain environmental liabilities and the continuing obligations arising under contracts and leases assumed by the debtors, as well as allowed administrative claims.
      On September 14, 2005, US Airways Group, US Airways, Inc., America West Holdings and America West Airlines, Inc. reached agreement with the two ALPA-represented pilot groups at the separate airlines on a comprehensive agreement, the Transition Agreement, that will govern many merger-related aspects of the parties’ relationships until there is a single collective bargaining agreement covering all pilots. Specifically, the Transition Agreement provides for:
  •  Permission for US Airways, Inc. and America West Airlines, Inc. to enter into a reciprocal code-share agreement;
  •  Continued representation of both pilot groups by ALPA;
  •  Allocation of aircraft, routes and job opportunities prior to full operational integration;
  •  Support by New US Airways Group for an application that ALPA will file with the National Mediation Board seeking a determination that the two currently separate pilot groups should be combined into one for purposes of collective bargaining;
  •  Standards and procedures related to integration of the two pilot seniority lists;
  •  A framework for negotiation of a single collective bargaining agreement covering the two pilot groups;
  •  A process and time frame for full operational integration;
  •  Agreed-upon provision to be included in bankruptcy court documents, including a profit-sharing plan that provides for profit sharing on 10% of all pretax income up to a 10% pretax income/revenue margin, and 15% of pretax income above the 10% pretax income/revenue margin, and an agreement covering pre-petition grievances filed against US Airways Group and US Airways, Inc.;
  •  Terms for operation of EMB-190 and CRJ-900 aircraft (these terms must be submitted to the US Airways, Inc. pilot group for ratification before it becomes effective);
  •  Various provisions related to 401(k) contributions, training pilot matters and resolution of grievances;
  •  Allocation of liability for merger-related expenses incurred by the pilot groups;

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  •  A procedure for resolution of disputes regarding the interpretation or application of the Transition Agreement; and
  •  Provisions establishing the effective date and duration of the Transition Agreement.
      On September 14, 2005, US Airways Group and US Airways, Inc. entered into Letter of Agreement #95, US Airways Group Equity, or Letter #95, with the pilot group representing pilots of US Airways, Inc. Letter #95 provides that US Airways, Inc. pilots designated by ALPA will receive 1.25 million shares of stock and options to purchase 1.1 million shares of stock of New US Airways Group. ALPA will notify US Airways, Inc. of the pilots designated to receive options no later than sixty days after the effective date of the plan of reorganization. Shares will be issued to those pilots no later than thirty days after ALPA’s notification. The options will be issued according to the following schedule: the first tranche of 500,000 options will be issued on January 31, 2006, a second tranche of 300,000 options will be issued on January 31, 2007, and the third tranche of 300,000 options will be issued on January 31, 2008. The options will have a term of five years from date of issuance. The exercise price for each tranche of options will be the average of the closing price per share of New US Airways Group common stock as reflected on the New York Stock Exchange (or other actively traded national securities exchange on which the common stock is principally traded) for the 20 business day period prior to the applicable options issuance date. Letter #95 also includes provisions restricting transfer of the options and governing anti-dilution.
      In connection with the negotiation of the Transition Agreement and Letter #95, US Airways, Inc. also agreed with ALPA to eliminate an existing 1% pay reduction that would apply to all pilots as a result of a lump sum payment due to pilots recalled from furlough and agreed to pay $500,000 to resolve an outstanding grievance over pay credits for pilots assigned by US Airways, Inc. to traveling to and from certain duty assignments.
New Equity Investments (see page 89)
      US Airways Group and America West Holdings entered into agreements with equity investors which agreed to contribute a total of $565 million in new equity to New US Airways Group, subject to a variety of conditions.
Accounting Treatment (see page 82)
      For accounting purposes only, we will account for the merger as a “reverse acquisition” using the purchase method of accounting in conformity with accounting principles generally accepted in the United States of America. Although the merger is structured so that America West Holdings became our wholly owned subsidiary at closing, America West Holdings will be treated as the acquiring company for accounting purposes in accordance with Statement of Financial Accounting Standards, or SFAS, No. 141, “Business Combinations.”

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The Offering
Common stock offering by New US Airways Group 8,500,000 shares
 
Common stock outstanding after the offering 68,263,680 shares (1)
 
Use of proceeds We estimate that our proceeds from this offering, before deducting underwriting discounts and offering expenses, will be approximately $150,000,000, or $172,500,000 if the underwriters’ overallotment option is exercised in full. We intend to use these net proceeds for general corporate purposes, including the possible redemption or repurchase of other securities of New US Airways Group. Pending such utilization, we intend to invest the proceeds in short-term, investment grade, interest-bearing securities.
 
Risk factors See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our common stock.
 
New York Stock Exchange Listing Symbol “LCC”
 
Overallotment option 1,275,000 shares, subject to the underwriters’ overallotment option, may be sold by us.
 
(1)  The number of shares outstanding after the offering:
  •   excludes 4,205,009 shares of common stock reserved for issuance upon exercise of outstanding stock options held by employees and directors at a weighted average exercise price of $23.01 per share;
 
  •   excludes 8,122,682 shares of common stock reserved for issuance upon exercise of warrants at a weighted average exercise price of $7.27;
 
  •   excludes 5,606,196 shares of common stock issuable upon the repurchase of America West Airlines, Inc. 7.25% convertible notes, assuming repurchase of the convertible notes at a New US Airways Group share price of $15.68;
 
  •   excludes 3,860,162 shares of common stock reserved for issuance upon conversion of America West Holdings 7.5% convertible notes;
 
  •   excludes 6,060,606 shares of common stock reserved for issuance upon conversion of New US Airways Group convertible notes that may be issued in a concurrent private offering to qualified institutional buyers;
 
  •   excludes shares of common stock which may be issued pursuant to the exercise of grants and/or options under New US Airways Group’s stock option incentive plan; and
 
  •   excludes any shares that may be issued pursuant to the options to purchase additional shares of New US Airways Group common stock granted to ALPA under the plan of reorganization and to the new equity investors under the July 7, 2005 letter agreement and discussed in this prospectus.

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Summary Selected Financial Data
US Airways Group, Inc.
      The selected consolidated financial data presented below is derived from US Airways Group’s consolidated financial statements for each of the periods in the five years ended December 31, 2004, 2003, 2002, 2001 and 2000 contained in US Airways Group’s Annual Reports on Form 10-K for the years ended December 31, 2004, 2003, 2002 and 2001 and US Airways Group’s unaudited consolidated financial statements contained in the Quarterly Reports on Form 10-Q for the quarters ended June 30, 2005 and 2004. The selected consolidated financial data should be read in conjunction with the consolidated financial statements for the respective periods, the related notes and the related reports of US Airways Group’s independent registered public accounting firm included in the annexes to this prospectus. US Airways Group adopted fresh-start reporting on March 31, 2003 in accordance with AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.” As a result of the application of fresh-start reporting, the Successor Company’s financial statements are not comparable with the Predecessor Company’s financial statements. See the consolidated financial statements of US Airways Group included in its Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, which are attached as annexes to this prospectus.
                                                                     
    Successor Company     Predecessor Company
           
    Six Months Ended       Nine Months     Three Months   Year Ended
    June 30,   Year Ended   Ended     Ended   December 31,
        December 31,   December 31,     March 31,    
    2005   2004   2004   2003     2003   2002   2001   2000
                                   
    (in millions, except per share amounts)
Consolidated statements of operations data:
                                                                 
Operating revenues
  $ 3,573     $ 3,658     $ 7,117     $ 5,312       $ 1,534     $ 6,977     $ 8,288     $ 9,269  
Operating expenses (b)
    3,732       3,717       7,495       5,356         1,741       8,294       9,971       9,322  
                                                   
Operating loss
  $ (159 )   $ (59 )   $ (378 )   $ (44 )     $ (207 )   $ (1,317 )   $ (1,683 )   $ (53 )
Income (loss) before cumulative effect of accounting change
  $ (343 )   $ (143 )   $ (611 )   $ (174 )     $ 1,635     $ (1,663 )   $ (2,124 )   $ (166 )
Cumulative effect of accounting change, net of applicable income taxes
                                    17       7       (103 )
                                                   
Net income (loss) (c)
  $ (343 )   $ (143 )   $ (611 )   $ (174 )     $ 1,635     $ (1,646 )   $ (2,117 )   $ (269 )
Earnings (loss) per common share before cumulative effect of accounting change:
                                                                 
 
Basic
  $ (6.26 )   $ (2.63 )   $ (11.19 )   $ (3.25 )     $ 24.02     $ (24.45 )   $ (31.59 )   $ (2.47 )
 
Diluted
  $ (6.26 )   $ (2.63 )   $ (11.19 )   $ (3.25 )     $ 24.02     $ (24.45 )   $ (31.59 )   $ (2.47 )
Earnings (loss) per common share:
                                                                 
 
Basic
  $ (6.26 )   $ (2.63 )   $ (11.19 )   $ (3.25 )     $ 24.02     $ (24.20 )   $ (31.48 )   $ (4.02 )
 
Diluted
  $ (6.26 )   $ (2.63 )   $ (11.19 )   $ (3.25 )     $ 24.02     $ (24.20 )   $ (31.48 )   $ (4.02 )
Shares used in computation:
                                                                 
 
Basic
    54.9       54.3       54.6       53.5         68.1       68.0       67.2       66.9  
 
Diluted
    54.9       54.3       54.6       53.5         68.1       68.0       67.2       66.9  
Cash Dividends per common share
  $     $  —     $     $  —       $     $     $  —     $  
Consolidated balance sheet data (at end of period):
                                                                 
Total Assets
  $ 7,902     $ 8,760     $ 8,422     $ 8,555       $     $ 6,543     $ 8,025     $ 9,127  
Long-term obligations and redeemable preferred stock (a)
  $ 4,183     $ 4,641     $ 4,871     $ 4,641       $     $ 5,009     $ 5,148     $ 4,379  
Total stockholders’ equity (deficit)
  $ (661 )   $ 87     $ (434 )   $ 172       $     $ (4,921 )   $ (2,615 )   $ (358 )
 
(a)  Includes debt, capital leases and postretirement benefits other than pensions (noncurrent). Also includes liabilities subject to compromise at June 30, 2005, December 31, 2004 and December 31, 2002.

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(b)  The operating results for the nine months ended December 31, 2003, the year ended December 31, 2002 and the year ended December 31, 2001 include the following unusual items:
  The nine months ended December 31, 2003 include:
  A $214 million, net of amounts due to certain affiliates, reduction in operating expenses in connection with the reimbursement for certain aviation-related security expenses in connection with the Emergency Wartime Supplemental Appropriations Act.
 
  A $35 million charge in connection with US Airways Group’s intention not to take delivery of certain aircraft scheduled for future delivery.
  The results for the year ended December 31, 2002 include:
  A $392 million impairment charge as a result of an impairment analysis conducted on the B737-300, B737-400, B757-200 and B767-200 aircraft fleets as a result of changes to the aircraft’s recoverability periods, the planned conversion of owned aircraft to leased aircraft and indications of possible material changes to the market values of these aircraft. The analysis revealed that estimated undiscounted future cash flows generated by these aircraft were less than their carrying values for four B737-300s, 15 B737-400s, 21 B757-200s and three B767-200s. In accordance with Statement of Financial Accounting Standards, or SFAS, No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the carrying values were reduced to fair market value.
 
  A curtailment credit of $120 million related to certain postretirement benefit plans and a $30 million curtailment charge related to certain defined benefit pension plans.
 
  An impairment charge of $21 million related to capitalized gates at certain airports in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” The carrying values of the affected gates were reduced to fair value based on a third party appraisal.
  The results for the year ended December 31, 2001 include:
  An aircraft impairment and related charge of $787 million. During August 2001, US Airways Group conducted an impairment analysis in accordance with SFAS No. 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” on its 36 F-100 aircraft, 16 MD-80 aircraft and 39 B737-200 aircraft as a result of changes to the fleet plan as well as indications of possible material changes to the market values of these aircraft. The analysis revealed that estimated undiscounted future cash flows generated by these aircraft were less than their carrying values. In accordance with SFAS 121, the carrying values were reduced to fair market value. This analysis resulted in a pretax charge of $403 million. In the aftermath of September 11, 2001, US Airways Group elected to accelerate the retirement of the aforementioned aircraft. All B737-200 aircraft retirements were accelerated to the end of 2001 while the F-100s and MD-80s were scheduled to be retired by April 2002. Based on this, US Airways Group conducted another impairment analysis which revealed that these aircraft were impaired. This culminated in an additional pretax charge of $173 million largely reflecting the further diminution in value of used aircraft arising from the events of September 11, 2001. Management estimated fair market value using third-party appraisals, published sources and recent sales and leasing transactions. As a result of the events of September 11, 2001, US Airways Group reviewed other aircraft-related assets which resulted in a pretax charge of $15 million as certain aircraft assets had carrying values in excess of their fair value less costs to sell. Management estimated fair value based on recent sales and leasing transactions. US Airways Group also recognized a pretax charge of $26 million in connection with the write-down to lower of cost or market of surplus parts for the F-100, B737-200 and MD-80 fleets. Management estimated market value based on recent sales activity related to these parts. During the first quarter of 2002, US Airways, Inc. entered into agreements to sell 97 surplus aircraft and related spare engines and parts, including substantially all of its DC-9, MD-80 and B737-200 aircraft. In connection with these agreements, US Airways Group reduced the carrying values of these assets resulting in a $148 million charge during the fourth quarter of 2001, including a $138 million impairment charge and a charge of $10 million to write down the related spare parts. Additionally, US Airways Group recognized a pretax impairment charge of $22 million in connection with the planned retirement of five B737-200 aircraft due to a third-party’s early return of certain leased B737-200 aircraft, and early retirement of certain other B737-200s during the first quarter of 2001.
 
  A $83 million charge for employee severance and benefits. In September 2001, US Airways Group announced that in connection with its reduced flight schedule it would terminate or furlough approximately 11,000 employees across all employee groups. Approximately 10,200 of the affected employees were terminated or furloughed on or prior to January 1, 2002. Substantially all the remaining affected employees were terminated or furloughed by May 2002. US Airways Group’s headcount reduction was largely accomplished through involuntary terminations/furloughs. In connection with this headcount reduction, US Airways Group offered a voluntary leave program to certain employee groups. Voluntary leave program participants generally received extended benefits (e.g. medical, dental, life insurance) but did not receive any furlough pay benefit. In the nine months ended December 31, 2003 and the year ended December 31, 2002 include $1 million and $3 million, respectively, in reductions to severance pay and benefit accruals related to the involuntary termination or furlough of certain employees.

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  Charges of $4 million and $66 million, respectively, representing the present value of the future minimum lease payments on three B737-200 aircraft and four F-100 aircraft, respectively, that were permanently removed from service.
 
  A charge of $13 million representing the unamortized leasehold improvement balance for facilities to be abandoned and aircraft to be parked as of the facility abandonment date or aircraft park date. In addition, US Airways Group recognized a pretax charge of $3 million representing the present value of future noncancelable lease commitments beyond the facility abandonment date.
 
  A $2 million curtailment charge related to a certain postretirement benefit plan.
(c)  Nonoperating income (expense) for the six months ended June 30, 2005 and the year ended December 31, 2004 include reorganization items, net of $28 million and $35 million, respectively. The nine months ended December 31, 2003 includes a $30 million gain on the sale of US Airways Group’s investment in Hotwire, Inc. In connection with the prior bankruptcy, a $1.92 billion gain and charges of $294 million of reorganization items, net, are included for the three months ended March 31, 2003 and the year ended December 31, 2002, respectively.

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America West Holdings Corporation
      The selected consolidated financial data presented below is derived from America West Holdings’ consolidated financial statements for each of the five years ended December 31, 2004, 2003, 2002, 2001 and 2000 contained in America West Holdings’ Annual Reports on Form 10-K for the years ended December 31, 2004, 2003, 2002 and 2001 and America West Holdings’ unaudited consolidated financial statements contained in America West Holdings’ quarterly reports on Form 10-Q for the quarters ended June 30, 2005 and 2004. The selected consolidated financial data should be read in conjunction with the consolidated financial statements for the respective periods, the related notes and the related reports of America West Holdings’ independent registered public accounting firms. See the consolidated financial statements of America West Holdings included in its Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, which are attached as annexes to this prospectus.
                                                           
    Six Months Ended    
    June 30,   Year Ended December 31,
         
    2005   2004   2004   2003   2002   2001   2000
                             
    (in thousands except per share amounts)
Consolidated statements of operations data:
                                                       
Operating revenues (a)
  $ 1,556,009     $ 1,343,485     $ 2,338,957     $ 2,254,497     $ 2,047,116     $ 2,065,913     $ 2,344,354  
Operating expenses (a)(b)
    1,475,653       1,302,581       2,382,728       2,232,362       2,206,540       2,476,594       2,356,991  
Operating income (loss)
    80,356       40,904       (43,771 )     22,135       (159,424 )     (410,681 )     (12,637 )
Income (loss) before income taxes (benefit) and cumulative effect of change in accounting principle (c)
    47,485       9,098       (88,993 )     57,534       (214,757 )     (324,387 )     24,743  
Income taxes (benefit)
                30       114       (35,071 )     (74,536 )     17,064  
Income (loss) before cumulative effect of change in accounting principle
    47,485       9,098       (89,023 )     57,420       (179,686 )     (249,851 )     7,679  
Net income (loss)
    47,485       9,098       (89,023 )     57,420       (387,909 )     (249,851 )     7,679  
Earnings (loss) per share before cumulative effect of change in accounting principle:
                                                       
 
Basic
    1.32       0.25       (2.47 )     1.66       (5.33 )     (7.42 )     0.22  
 
Diluted
    0.92       0.17       (2.47 )     1.26       (5.33 )     (7.42 )     0.22  
Earnings (loss) per share:
                                                       
 
Basic
    1.32       0.25       (2.47 )     1.66       (11.50 )     (7.42 )     0.22  
 
Diluted (d)
    0.92       0.17       (2.47 )     1.26       (11.50 )     (7.42 )     0.22  
Shares used for computation:
                                                       
 
Basic
    36,015       35,928       36,026       34,551       33,723       33,670       35,139  
 
Diluted (d)
    62,551       52,070       36,026       56,113       33,723       33,670       35,688  
Consolidated balance sheet data (at end of period):
                                                       
Total assets
  $ 1,604,817     $ 1,645,017     $ 1,475,264     $ 1,614,385     $ 1,438,953     $ 1,469,218     $ 1,568,515  
Long-term debt, less current maturities
  $ 588,060     $ 647,670     $ 635,129     $ 688,965     $ 700,983     $ 224,551     $ 145,578  
Total stockholders’ equity
    84,138       134,238       36,447       125,989       68,178       420,363       667,073  

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(a)  Effective with the first quarter of 2005, America West Holdings changed the presentation of its regional alliance agreement with Mesa Airlines to the gross basis of presentation. Previously, America West Holdings used the net basis of presentation. The amounts below depict total operating revenues and total operating expenses under the gross basis of presentation.
                                         
    Year Ended December 31,
     
    2004   2003   2002   2001   2000
                     
    (in thousands)
Operating revenues
  $ 2,711,530     $ 2,541,471     $ 2,309,162     $ 2,273,339     $ 2,522,553  
Operating expenses
    2,755,301       2,519,336       2,468,586       2,684,020       2,535,190  
(b)  The 2004 results include a $16.3 million net credit associated with the termination of the rate per engine hour agreement with General Electric Engine Services for overhaul maintenance services on V2500-A1 engines, a $0.6 million credit related to the revision of the estimated costs associated with the sale and leaseback of certain aircraft recorded in the first quarter of 2002 and a $0.4 million credit related to the revision of estimated charges associated with the Columbus, Ohio hub closure originally recorded in the second quarter of 2003. These credits were partially offset by $1.9 million of net charges related to the return of certain Boeing 737-200 aircraft which includes termination payments of $2.1 million, the write-down of leasehold improvements and deferred rent of $2.8 million, offset by the net reversal of maintenance reserves of $3.0 million. The 2003 period includes $16.0 million of charges resulting from the elimination of America West Airlines, Inc.’s hub operations in Columbus, Ohio ($11.1 million), the reduction-in-force of certain management, professional and administrative employees ($2.3 million), and the impairment of certain owned Boeing 737-200 aircraft that have been grounded ($2.6 million) offset by a $1.1 million reduction of charges due to a revision of the estimated costs related to the early termination of certain aircraft leases and a $0.5 million reduction related to the revision of estimated costs associated with the sale and leaseback of certain aircraft. The 2002 period includes $19.0 million of charges primarily related to the restructuring completed on January 18, 2002, resulting from the events of September 11, 2001. The 2001 period includes $141.6 million of special charges related to the impairment of reorganization value in excess of amounts allocable to identifiable assets and owned aircraft and engines, as well as the earlier-than-planned return of seven leased aircraft and severance expenses following a reduction-in-force in 2001. America West Holdings reclassified amounts related to settled fuel hedge transactions and mark-to-market adjustments on open hedge instruments from fuel expense to gain (loss) on derivative instruments, net. The amounts for the years ended December 31, 2004 and 2003 were an addition to fuel expense of $30.5 million and $10.7 million, respectively. For the years ended December 31, 2002 and 2001, the amounts reduced fuel expense by $0.7 million and $7.2 million, respectively.
 
(c)  Nonoperating income (expense) in the 2004 period includes a $30.5 million net gain on derivative instruments, which included mark-to-market changes and settled transactions, and $1.3 million for the write-off of debt issue costs in connection with the refinancing of a term loan issued by General Electric Capital Corporation with an aggregate amount of $110.6 million. The 2003 period includes federal government assistance of $81.3 million recognized as nonoperating income under the Emergency Wartime Supplemental Appropriations Act and $8.5 million and $108.2 million recognized in 2002 and 2001, respectively, as nonoperating income under the Air Transportation Safety and System Stabilization Act. The 2003, 2002 and 2001 periods include a $10.7 million net gain, $0.7 million net loss and $7.2 million net loss on derivative instruments, respectively, including mark-to-market changes and settled transactions.
 
(d)  America West Holdings diluted earnings per share for the year ended December 31, 2003 includes the impact related to the 7.25% notes under the “if-converted” methodology. The impact reduced diluted earnings per share by $0.03 from $1.29 to $1.26.

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Selected Unaudited Pro Forma Condensed Combined Financial Data
      New US Airways Group will account for the merger as a “reverse acquisition” using the purchase method of accounting in conformity with accounting principles generally accepted in the United States of America. Although the merger is structured such that America West Holdings became our wholly owned subsidiary at closing, America West Holdings will be treated as the acquiring company for accounting purposes in accordance with SFAS No. 141, “Business Combinations,” due to the following factors: (1) America West Holdings stockholders are expected to own approximately 33% of New US Airways Group common stock outstanding immediately following the merger and this offering as compared to certain unsecured creditors of the debtors who will hold approximately 10% (these percentages reflect certain assumptions concerning the likely exchange of certain convertible debt and the impact of certain securities that are dilutive at the per share purchase price paid by the equity investors); (2) America West Holdings received a larger number of designees to the New US Airways Group board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer serves as Chairman and Chief Executive Officer of New US Airways Group following the merger.
      The following unaudited pro forma condensed combined balance sheet as of June 30, 2005 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2004 and six months ended June 30, 2005 are based on the historical consolidated financial statements of US Airways Group and America West Holdings included in their respective reports on Form 10-Q and Form 10-K attached as annexes to this prospectus, giving effect to the merger and other transactions that were effective upon completion of the merger.
      The unaudited pro forma condensed combined statements of operations give effect to the merger as if it had occurred on January 1, 2004 and the unaudited pro forma condensed combined balance sheet gives effect to the merger as if it had occurred on June 30, 2005. The two major categories of adjustments reflected in the pro forma condensed combined financial statements are “Purchase Accounting Adjustments” and “Other Adjustments.”
      For more detailed information about the unaudited pro forma condensed combined financial statements, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.”
                   
    Pro Forma   Pro Forma
    Combined   Combined
    Six Months   Year Ended
    Ended June 30,   December 31,
    2005   2004
         
    (dollars in millions, except per
    share data)
Statement of Operations Data:
               
 
Revenues
  $ 5,140     $ 9,477  
 
Total operating expenses
    5,241       9,957  
             
 
Operating loss
  $ (101 )   $ (480 )
 
Net loss
  $ (272 )   $ (724 )
 
Basic and diluted loss per share of common stock
  $ (4.56 )   $ (12.14 )
                   
    Pro Forma   Pro Forma
    Combined   As Adjusted
    June 30,   June 30,
    2005 (a)   2005 (b)
         
    (dollars in millions)
Balance Sheet Data:
               
 
Cash, cash equivalents and short term investments
  $ 1,772     $ 1,922  
 
Net property and equipment
  $ 3,161     $ 3,161  
 
Total assets
  $ 8,324     $ 8,474  
 
Long-term debt and capital lease obligations, including current maturities
  $ 3,523     $ 3,523  
 
Total stockholders’ equity
  $ 459     $ 609  
(a)  For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.”
 
(b)  The “Pro Forma As Adjusted June 30, 2005” column reflects the sale of an aggregate of 8,500,000 shares of New US Airways Group common stock at an assumed offering price of $17.65 per share, for aggregate proceeds of $150 million (excluding the underwriters’ discount and any proceeds from the possible exercise of the overallotment option by the underwriters), and reflects the expected issuance of $125 million of convertible notes in a separate private offering to qualified institutional buyers and the use of the proceeds from this issuance to satisfy the GE obligation of the same amount.

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RISK FACTORS
      In addition to the other information included in this prospectus, including the matters addressed in “Cautionary Statement Concerning Forward-Looking Statements,” you should carefully consider the following risks before deciding whether to purchase the shares of common stock offered by this prospectus.
Risks Related to Our Business
Our business is dependent on the price and availability of aircraft fuel. Continued periods of historically high fuel costs, significant disruptions in the supply of aircraft fuel or significant further increases in fuel costs could have a significant negative impact on our operating results.
Our operating results are significantly impacted by changes in the availability or price of aircraft fuel. Fuel prices increased substantially in 2004 compared with 2003 and have continued to increase in 2005. Due to the competitive nature of the airline industry, we generally have not been able to increase our fares when fuel prices have risen in the past and we may not be able to do so in the future. Although we are currently able to obtain adequate supplies of aircraft fuel, it is impossible to predict the future availability or price of aircraft fuel. In addition, from time to time we enter into hedging arrangements to protect against rising fuel costs. Our ability to hedge in the future, however, may be limited.
We may not perform as well financially as we expect following the merger.
In deciding to enter into the merger agreement, US Airways Group and America West Holdings considered the benefits of operating as a combined company, including, among others: an enhanced ability to compete in the airline industry and the fact that the proprietary brands of the combined company would permit New US Airways Group to further differentiate itself from other airline companies. The success of the merger will depend, in part, on our ability to realize the anticipated revenue opportunities and cost savings from combining the businesses of US Airways Group and America West Holdings. We have estimated that the combined companies expect to realize approximately $600 million in incremental operating cost and revenue synergies. We cannot assure you, however, that these synergies will be realized.
To realize the anticipated benefits from the merger, we must successfully combine the businesses of US Airways Group and America West Holdings in a manner that permits those costs savings and other synergies to be realized in a timely fashion. In addition, we must achieve these savings without adversely affecting revenues or suffering a business interruption. If we are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.
We cannot assure you that the merger will result in combined results of operations and financial condition consistent with the pro forma condensed combined financial data or superior to what America West Holdings and US Airways Group could have achieved independently. Nor do we represent to you that the projections which have been filed as an appendix to the debtors’ disclosure statement can or will be achieved. We provide more information about these projections in the section entitled “New US Airways Group — Additional Information Regarding Projections of New US Airways Group.”
The integration of US Airways Group and America West Holdings following the merger will present significant challenges.
US Airways Group and America West Holdings will face significant challenges in consolidating functions, integrating their organizations, procedures and operations in a timely and efficient manner and retaining key US Airways Group and America West Holdings personnel. The integration of US Airways Group and America West Holdings will be costly, complex and time consuming, and the managements of US Airways Group and America West Holdings will have to devote substantial effort to such integration that could otherwise be spent on operational matters or other strategic opportunities.
We expect that the merger will result in certain synergies, business opportunities and growth prospects. We, however, may never realize these expected synergies, business opportunities and growth prospects. New

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US Airways Group may experience increased competition that limits its ability to expand its business. We may not be able to capitalize on expected business opportunities, including retaining current customers. In addition, assumptions underlying estimates of expected cost savings and expected revenue synergies may be inaccurate, or general industry and business conditions may deteriorate. Furthermore, integrating operations will require significant efforts and expenses. Our management may have its attention diverted from ongoing operations while trying to integrate.
US Airways Group continues to experience significant operating losses.
Despite significant labor cost reductions and other cost savings achieved in the prior bankruptcy, US Airways Group has continued to experience significant operating losses which we expect to continue through 2006. Since early 2001, the U.S. airline industry’s revenue performance has fallen short of what would have been expected based on historical growth trends. This shortfall has been caused by a number of factors, including rising fuel costs, as discussed above, and the factors discussed below.
The rapid growth of low-cost carriers has had a profound impact on industry revenues. Using the advantage of low unit costs, these carriers offer lower fares, particularly those targeted at business passengers, in order to shift demand from larger, more-established airlines. As a result of growth, these low-cost carriers now transport nearly 30% of all domestic U.S. passengers compared to less than 10% a decade ago. They now compete for, and thus influence industry pricing on, approximately 81% of all domestic U.S. passenger ticket sales compared to less than 20% a decade ago. As a result of their better financial performance they have access to capital to fund fleet growth. Low-cost carriers are expected to continue to increase their market share through pricing and growth.
The advent of Internet travel websites has lowered the cost to airlines of selling tickets. However, it has also had a large negative impact on airline revenues because travel consumers now have access to nearly perfect pricing information and, as a result, have become more efficient at finding lower fare alternatives.
Union disputes, employee strikes and other labor-related disruptions may adversely affect our operations.
Our business plan includes assumptions about labor costs going forward. Currently, the labor costs of both America West Holdings and US Airways Group are very competitive and very similar; however, we cannot assure you that labor costs going forward will remain competitive, either because our agreements may become amendable or because competitors may significantly reduce their labor costs.
Approximately 78% of the employees within US Airways Group and approximately 81% of the employees within America West Holdings are represented for collective bargaining purposes by labor unions. In the United States, these employees are organized into nine labor groups represented by five different unions at US Airways, Inc., seven labor groups represented by four different unions at America West Airlines, Inc., four labor groups represented by four different unions at Piedmont Airlines, and four labor groups represented by four different unions at PSA Airlines. There are additional unionized groups of US Airways, Inc. employees abroad.
Relations between air carriers and labor unions in the United States are governed by the Railway Labor Act, or the RLA. Under the RLA, collective bargaining agreements generally contain “amendable dates” rather than expiration dates, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the National Mediation Board. This process continues until either the parties have reached agreement on a new collective bargaining agreement, or the parties have been released to “self-help” by the National Mediation Board. Although in most circumstances the RLA prohibits strikes, after release by the National Mediation Board carriers and unions are free to engage in self-help measures such as strikes and lock-outs. None of the US Airways, Inc. labor agreements becomes amendable until December 31, 2009. Of the America West Airlines, Inc. labor agreements, three are currently amendable, a fourth becomes amendable in 2006 and negotiations are proceeding with a fifth group for an initial collective bargaining agreement.

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There is the potential for litigation to arise in the context of airline mergers. Unions may seek to delay or halt a transaction, may seek monetary damages, either in court or in grievance arbitration, may seek to compel airlines to engage in the bargaining processes where the airline believes it has no such obligation or may seek to assert rights to participate in corporate governance, including through board representation. There is a risk that one or more unions may pursue such judicial or arbitral avenues in the context of the merger, and if successful, could create additional costs that we did not anticipate.
There is also a risk that disgruntled employees, either with or without union involvement, could engage in illegal slow-downs, work stoppages, partial work stoppages, sick-outs or other action short of a full strike that could individually or collectively harm the operation of the airline and impair its financial performance.
Fluctuations in interest rates could adversely affect our liquidity, operating expenses and results.
A substantial portion of our indebtedness bears interest at fluctuating interest rates. These are primarily based on the London interbank offered rate for deposits of U.S. dollars, or LIBOR. LIBOR tends to fluctuate based on general economic conditions, general interest rates, federal reserve rates and the supply of and demand for credit in the London interbank market. We have not hedged our interest rate exposure and, accordingly, our interest expense for any particular period may fluctuate based on LIBOR and other variable interest rates. To the extent these interest rates increase, our interest expense will increase, in which event, we may have difficulties making interest payments and funding our other fixed costs and our available cash flow for general corporate requirements may be adversely affected.
We rely heavily on automated systems to operate our business and any failure of these systems, or the failure to integrate them successfully following the merger, could harm our business.
We depend on automated systems to operate our business, including our computerized airline reservation systems, our flight operations systems, our telecommunication systems and our websites. Our website and reservation systems must be able to accommodate a high volume of traffic and deliver important flight information. Substantial or repeated website, reservations systems or telecommunication systems failures could reduce the attractiveness of our services and could cause our customers to purchase tickets from another airline. Furthermore, we must integrate the automated systems of America West Holdings and US Airways Group. Any disruption in these systems could result in the loss of important data, increase our expenses and generally harm our business.
If we incur problems with any of our third party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services.
Our reliance upon others to provide essential services on behalf of our operations may result in the relative inability to control the efficiency and timeliness of contract services. We have entered into agreements with contractors to provide various facilities and services required for our operations, including aircraft maintenance, ground facilities and baggage handling. It is likely that similar agreements will be entered into in any new markets we decide to serve. All of these agreements are subject to termination after notice. Any material problems with the efficiency and timeliness of contract services could have a material adverse effect on our business, financial condition and results of operations.
The travel industry, materially adversely affected by the September 11, 2001 terrorist attacks, continues to face on-going security concerns and cost burdens associated with security.
The attacks of September 11, 2001 materially impacted and continue to impact air travel. In November 2001, the President signed into law the Aviation and Transportation Security Act, or the Aviation Security Act. This law federalized substantially all aspects of civil aviation security, creating a new Transportation Security Administration, or TSA. Under the Aviation Security Act, substantially all security screeners at airports are now federal employees and significant other elements of airline and airport security are now overseen and performed by federal employees, including federal security managers, federal law enforcement officers, federal air marshals and federal security screeners. Among other matters, the law mandates improved flight

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deck security, deployment of federal air marshals onboard flights, improved airport perimeter access security, airline crew security training, enhanced security screening of passengers, baggage, cargo, mail, employees and vendors, enhanced training and qualifications of security screening personnel, additional provision of passenger data to U.S. Customs and enhanced background checks. These increased security procedures introduced at airports since the attacks have increased costs to airlines. We would also be materially impacted in the event of further terrorist attacks or perceived terrorist threats.
Increases in insurance costs or reductions in insurance coverage may adversely impact our operations and financial results.
The terrorist attacks of September 11, 2001 led to a significant increase in insurance premiums and a decrease in the insurance coverage available to commercial airline carriers. Accordingly, our insurance costs increased significantly and our ability to continue to obtain insurance even at current prices remains uncertain. In addition, we have obtained third party war risk (terrorism) insurance through a special program administered by the FAA resulting in lower premiums than if we had obtained this insurance in the commercial insurance market. If the federal insurance program terminates, we would likely face a material increase in the cost of war risk insurance. Because of competitive pressures in our industry, our ability to pass additional insurance costs to passengers is limited. As a result, further increases in insurance costs or reductions in available insurance coverage could harm our earnings.
Changes in government regulation could increase our operating costs and limit our ability to conduct our business.
Airlines are subject to extensive regulatory requirements. In the last several years, Congress has passed laws and the U.S. Federal Aviation Administration has issued a number of maintenance directives and other regulations. These requirements impose substantial costs on airlines.
Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce revenues. The ability of U.S. carriers to operate international routes is subject to change because the applicable arrangements between the U.S. and foreign governments may be amended from time to time, or because appropriate slots or facilities may not be available. We cannot assure you that laws or regulations enacted in the future will not adversely affect our operating costs.
A small number of shareholders beneficially own a substantial amount of our common stock.
A significant portion of the New US Airways Group common stock is beneficially owned by a relatively small number of equity investors. As a result, until these stockholders sell a substantial portion of their shares, they will have a greater percentage vote in matters that may be presented for a vote to stockholders than most other stockholders. This may make it more difficult for other stockholders to influence votes on matters that may come before stockholders of New US Airways Group.
The use of America West Holdings’ and US Airways Group’s respective pre-merger NOLs and certain other tax attributes may be limited following the merger.
Although New US Airways Group is the same legal entity as US Airways Group and continues as the publicly traded parent entity, each of America West Holdings and US Airways Group underwent an “ownership change,” as defined in Internal Revenue Code Section 382, in connection with the merger. When such an ownership change occurs, Section 382 limits the companies’ future ability to utilize any net operating losses, or NOLs, generated before the ownership change and certain subsequently recognized “built-in” losses and deductions, if any, existing as of the date of the ownership change. The companies’ ability to utilize new NOLs arising after the ownership change would not be affected. An ownership change generally occurs if certain persons or groups increase their aggregate ownership percentage in a corporation’s stock by more than 50 percentage points in the shorter of any three-year period or the period since the last ownership change.

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The airline industry is intensely competitive.
Our competitors include other major domestic airlines as well as foreign, regional and new entrant airlines, some of which have more financial resources or lower cost structures than ours, and other forms of transportation, including rail and private automobiles. In most of our markets we compete with at least one low-cost air carrier. Our revenues are sensitive to numerous factors, and the actions of other carriers in the areas of pricing, scheduling and promotions can have a substantial adverse impact on overall industry revenues. These factors may become even more significant in periods when the industry experiences large losses, as airlines under financial stress, or in bankruptcy, may institute pricing structures intended to achieve near-term survival rather than long-term viability.
Certain US Airways Group liabilities were not fully extinguished as a result of confirmation of the plan of reorganization.
While a significant amount of US Airways Group’s current liabilities were discharged as a result of the debtors’ bankruptcy proceedings, a large number of US Airways Group obligations remain in effect following the merger. Various agreements and liabilities remain in place, including secured financings, aircraft agreements, certain environmental liabilities, certain grievances with our labor unions, leases and other contracts, as well as allowed administrative claims, that will still subject us to substantial obligations and liabilities. For more information regarding these liabilities, refer to the section entitled “Where You Can Find More Information About US Airways Group and America West Holdings.”
Our high level of fixed obligations limits our ability to fund general corporate requirements and obtain additional financing, limits our flexibility in responding to competitive developments and increases our vulnerability to adverse economic and industry conditions.
We have a significant amount of fixed obligations, including debt, aircraft leases and financings, aircraft purchase commitments, leases of airport and other facilities and other cash obligations. As a result of the substantial fixed costs associated with these obligations:
  A decrease in revenues would result in a disproportionately greater percentage decrease in earnings.
  We may not have sufficient liquidity to fund all of these fixed costs if our revenues decline or costs increase.
  We may have to use our working capital to fund these fixed costs instead of funding general corporate requirements, including capital expenditures.
  We may not have sufficient liquidity to respond to competitive developments and adverse economic conditions.
Our obligations also impair our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business. Our existing indebtedness is secured by substantially all of our assets, leaving us with limited collateral for additional financing.
Our ability to pay the fixed costs associated with our contractual obligations depends on our operating performance and cash flow, which in turn depend on general economic and political conditions. A failure to pay our fixed costs or a breach of our contractual obligations could result in a variety of adverse consequences, including the acceleration of our indebtedness, the withholding of credit card proceeds by the credit card servicers and the exercise of remedies by our creditors and lessors. In such a situation, it is unlikely that we would be able to fulfill our obligations under or repay the accelerated indebtedness, make required lease payments or otherwise cover our fixed costs.
Interruptions or disruptions in service at one of our hub airports could have a material adverse impact on our operations.
We expect that we will operate primarily through primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Pittsburgh, Las Vegas, New York, Washington, D.C. and Boston. A majority of

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our flights will either originate or fly into one of these hubs. A significant interruption or disruption in service at one of our hubs could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, operations and financial performance.
We are at risk of losses and adverse publicity stemming from any accident involving any of our aircraft.
If one of our aircraft were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to cover damages arising from any future accidents may be inadequate. In the event that New US Airways Group’s insurance is not adequate, we may be forced to bear substantial losses from an accident. In addition, any accident involving an aircraft that New US Airways Group operates could create a public perception that our aircraft are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on New US Airways Group’s aircraft and adversely impact our financial condition and operations.
Our business is subject to weather factors and seasonal variations in airline travel, which cause our results to fluctuate.
Our operations are vulnerable to severe weather conditions in parts of our network that could disrupt service, create air traffic control problems, decrease revenue, and increase costs, such as during hurricane season in the Caribbean and Southeast United States, and snow and severe winters in the Northeast United States. In addition, the air travel business historically fluctuates on a seasonal basis. Due to the greater demand for air and leisure travel during the summer months, revenues in the airline industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year. The results of operations of the combined company will likely reflect weather factors and seasonality, and therefore quarterly results are not necessarily indicative of those for an entire year and the prior results of America West Holdings and US Airways Group are not necessarily indicative of the combined company’s future results.
Employee benefit plans represent significant continuing costs to the sponsoring employers.
America West Holdings and the subsidiaries of US Airways Group sponsor employee benefit plans and arrangements that provide retirement, medical, disability, and other benefits to our employees and participating retirees. Many of the benefits provided under these plans are mandated under various collective bargaining agreements, while others are provided on a voluntary basis as a means to recruit and retain valuable employees.
While US Airways Group recently terminated certain defined benefit pension plan and related retiree benefits, the benefit obligations associated with the remaining employee benefit plans and related costs represent a substantial continuing cost to the sponsors. In addition, many of these employee benefit plans are subject to federal laws such as the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code, and must be maintained accordingly. Continued compliance with these employee benefit plans’ rules is necessary, as even unintentional failures to comply can result in significant fines and penalties. Employee benefit plans in general also are increasingly the subject of protracted litigation, especially following significant plan design changes. Certain of the plans sponsored by the subsidiaries of US Airways Group have undergone several changes in connection with the Chapter 11 cases.
Risks Related to Our Common Stock
Our common stock has no trading history and its market price may be volatile.
Because our common stock began trading on the New York Stock Exchange on the date of this prospectus, there is no trading history for our common stock. The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:
  our operating results failing to meet the expectations of securities analysts or investors;
 
  changes in financial estimates or recommendations by securities analysts;
 
  material announcements by us or our competitors;

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  movements in fuel prices;
 
  new regulatory pronouncements and changes in regulatory guidelines;
 
  general and industry-specific economic conditions;
 
  public sales of a substantial number of shares of our common stock following this offering; and
 
  general market conditions.
Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of New US Airways Group will make it difficult for stockholders to change the composition of our board of directors and may discourage takeover attempts that some of our stockholders may consider beneficial.
Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of New US Airways Group may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of New US Airways Group and its stockholders. These provisions include, among other things, the following:
  a classified board of directors with three-year staggered terms;
 
  advance notice procedures for stockholder proposals to be considered at stockholders’ meetings;
 
  the ability of New US Airways Group’s board of directors to fill vacancies on the board;
 
  a prohibition against stockholders taking action by written consent;
 
  a prohibition against stockholders calling special meetings of stockholders;
 
  •   requiring the approval of holders of at least 80% of the voting power of the shares entitled to vote in the election of directors for the stockholders to amend the amended and restated bylaws; and
 
  •   super majority voting requirements to modify or amend specified provisions of New US Airways Group’s amended and restated certificate of incorporation.
These provisions are not intended to prevent a takeover, but are intended to protect and maximize the value of New US Airways Group’s stockholders’ interests. While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our board of directors, they could enable our board of directors to prevent a transaction that some, or a majority, of our stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors. In addition, New US Airways Group is subject to the provisions of Section 203 of the Delaware General Corporation Law, which prohibits business combinations with interested stockholders. Interested stockholders do not include stockholders whose acquisition of New US Airways Group’s securities is pre-approved by the board of directors under Section 203.
Our charter documents include provisions limiting voting and ownership by foreign owners.
Our amended and restated certificate of incorporation provides that shares of capital stock may not be voted by or at the direction of persons who are not citizens of the United States if the number of such shares would exceed 24.9% of the voting stock of our company. In addition, any attempt to transfer equity securities to a non-U.S. person in excess of 49.9% of our outstanding equity securities will be void and of no effect.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
      Certain of the statements contained herein should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” and “continue” and similar terms used in connection with statements regarding the companies’ outlook, expected fuel costs, the revenue environment, and the companies’ respective expected 2005 financial performance. These statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings and US Airways Group, including future financial and operating results, the companies’ plans, objectives, expectations and intentions and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause the companies’ actual results and financial position to differ materially from these statements. These risks and uncertainties include, but are not limited to, those described above under the heading “Risk Factors” and the following:
  the ability of the companies to achieve the synergies anticipated as a result of combining the companies and to achieve such synergies in a timely manner;
 
  the ability of the companies to obtain and maintain any necessary financing for operations and other purposes;
 
  the ability of the companies to maintain adequate liquidity;
 
  the impact of historically high fuel prices;
 
  the ability to achieve the asset sales contemplated but not yet completed in a timely manner;
 
  the ability to integrate the management and operations of the companies;
 
  the impact of global instability including the continuing impact of the continued military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events;
 
  changes in prevailing interest rates;
 
  the ability to attract and retain qualified personnel;
 
  the ability of the companies to attract and retain customers;
 
  the cyclical nature of the airline industry;
 
  competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines;
 
  economic conditions;
 
  reliance on automated systems and the impact of any failure of these systems;
 
  labor costs;
 
  security-related and insurance costs;
 
  weather conditions;
 
  government legislation and regulation;
 
  relations with unionized employees generally and the impact and outcome of the labor negotiations;
 
  New US Airways Group’s ability to continue as a going concern;

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  the ability of the companies to obtain and maintain normal terms with vendors and service providers;
 
  the companies’ ability to maintain contracts that are critical to their operations;
 
  the potential adverse impact of the Chapter 11 proceedings on New US Airways Group’s liquidity or results of operations;
 
  the ability of the companies to operate pursuant to the terms of their financing facilities (particularly the financial covenants);
 
  the ability of US Airways Group to fund and execute its business plan after the Chapter 11 proceedings and in the context of a plan of reorganization; and
 
  other risks and uncertainties listed from time to time in the companies’ reports to the SEC.
      There may be other factors not identified above of which the companies are not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The companies assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these estimates other than as required by law.

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USE OF PROCEEDS
      The proceeds we will receive from the sale of the 8,500,000 shares of common stock offered hereby, or 9,775,000 shares of common stock if the underwriters’ overallotment option is exercised in full, at an assumed offering price of $17.65 per share, and before deducting underwriting discounts and offering expenses, are estimated to be approximately $150,000,000, or $172,500,000 if the underwriters’ overallotment option is exercised in full. We currently intend to use the proceeds for general corporate purposes, including the possible redemption or repurchase of other securities of New US Airways Group. Pending such utilization, we intend to invest the proceeds in short-term, investment grade, interest-bearing securities.
DIVIDEND POLICY
      We presently intend to retain any earnings for use in our business and do not anticipate paying cash dividends on the New US Airways Group common stock in the foreseeable future. In addition, certain of our debt agreements prohibit us from paying cash dividends.

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CAPITALIZATION
      The following table sets forth information regarding (1) the historical capitalization of America West Holdings and US Airways Group at June 30, 2005; (2) the pro forma capitalization of New US Airways Group immediately following the effective time of the merger; and (3) the pro forma capitalization of New US Airways Group immediately following the effective time of the merger as adjusted to reflect the sale of shares of New US Airways Group common stock at an assumed offering price of $17.65 per share and the sale of $125 million of convertible notes being offered concurrently herewith to qualified institutional buyers offset in part by the payment of $125 million in cash to an affiliate of GE pursuant to the GE Master MOU, as amended, based upon certain assumptions that are more fully described in the footnotes below.
                               
        Pro Forma   Pro Forma
        Combined   As Adjusted
    Historical   June 30,   June 30,
    June 30, 2005   2005   2005
             
    (dollars in millions)
Indebtedness
                       
 
Secured
                       
   
US Airways Group
                       
     
Equipment notes payable, net of discount of $105 million and $99 million on a historical and pro forma basis, respectively, installments due 2005 to 2022 (a)
  $ 1,727     $ 1,733     $ 1,733  
     
ATSB guaranteed loan, net of discount of $15 million and $0 on a historical and pro forma basis, respectively (b)
    693       708       708  
     
2001 GE credit facility, installments due 2006 to 2010 (c)
    7       28       28  
     
Eastshore Aviation, LLC debtor in possession financing, due 2005
    100              
     
GE bridge facility due 2005 (c)
    56              
     
Airbus term loan, installments due 2008 to 2010 (d)
          153       153  
   
America West Holdings
                       
     
ATSB guaranteed loan, installments due 2005 through 2008 (b)
          300       300  
     
GECC term loan, installments due 2006 to 2010 (c)
    111       111       111  
     
Senior secured discount notes, net of discount of $5 million, installments due 2005 to 2009 (e)
    31       31       31  
     
Equipment notes payable, installments due 2005 to 2008
    35       35       35  
                   
      2,760       3,099       3,099  
 
Unsecured
                       
   
US Airways Group
                       
     
Class B mandatorily redeemable preferred stock, net of discount of $22 million, due 2011 (f)
    53              
     
GE obligation(c)
          125        
     
Convertible notes(m)
                125  
     
PBGC senior note, due 2012(n)
          10       10  
   
America West
                       
     
ATSB guaranteed loan, installments due 2005 through 2008 (b)
    300              
     
7.25% senior exchangeable notes, net of discount of $166 million, due 2023 (g)
    87       87       87  
     
7.5% convertible senior notes, net of discount of $21 million, due in 2009 (h)
    92       92       92  
     
Industrial development bonds, due 2023 (i)
    29       29       29  
     
Promissory notes, due 2005 (j)
    18       18       18  
     
State loan, installments due 2005 through 2007
    1       1       1  
                   
      580       362       362  
                   
Total Debt
  $ 3,340     $ 3,461     $ 3,461  
                   
 
Stockholders’ Equity (k)
                       
 
Common stock $0.01 par value 200,000,000 shares authorized; 59,654,071 shares issued and outstanding pro forma combined; 68,263,680 shares issued and outstanding as adjusted (l)
          $ 1     $ 1  
                           
 
Additional paid-in capital
            986       1,136  
 
Accumulated deficit
            (528 )     (528 )
                   
Total Stockholders’ Equity
          $ 459     $ 609  
                   
 
(a) Equipment notes payable balances are as of June 30, 2005, bearing interest at rates of 4.17% to 9.01%. Various sale and leaseback transactions on certain aircraft have been completed since June 30, 2005 which are not reflected in the table above.
 
(b) US Airways Group ATSB Guaranteed Loan — As part of its reorganization under the prior bankruptcy, US Airways, Inc. received a $900 million loan guarantee under the Air Transportation Safety and System Stabilization Act from the ATSB in connection with a

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$1 billion term loan financing that was funded on March 31, 2003. The ATSB loan is secured by substantially all of the present and future assets of the US Airways Group not otherwise encumbered (including certain cash and investment accounts, previously unencumbered aircraft, aircraft engines, spare parts, flight simulators, real property, takeoff and landing slots, ground equipment and accounts receivable), other than certain specified assets, including assets which are subject to other financing agreements. As of June 30, 2005, $708 million was outstanding under the ATSB loan. The US Airways Group ATSB loan bears interest at a variable interest rate on Tranche A (the guaranteed 90% of the loan balance) equal to the weighted average cost related to the issuance of certain commercial paper notes and other short-term borrowings plus 2.30%, which includes a default rate of 200 basis points, plus guarantee fees of 6.2%, which includes a default rate of 200 basis points, and on Tranche B (the remaining 10% of the loan balance) of LIBOR plus 800 basis points, which includes a default rate of 400 basis points.
 
In connection with the ATSB guarantee, the ATSB received 7,635,000 warrants that enable it to purchase shares of US Airways Group’s Class A common stock at $7.42 per share. The value attributed to the warrants at issuance is being amortized over the term of the warrants. These warrants were cancelled under the plan of reorganization. US Airways Group reached agreement with the ATSB concerning an interim extension to the ATSB cash collateral agreement. The interim agreement was scheduled to expire on the earlier of the effective date of the debtors’ plan of reorganization or October 25, 2005 and required US Airways Group, among other conditions, to maintain a weekly minimum unrestricted cash balance which decreased periodically during the term of the extension from $325 million to $200 million.
 
For more information on US Airways Group’s ATSB loan, see the section entitled “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
 
America West Holdings ATSB Guaranteed Loan — In January 2002, America West Airlines, Inc. closed a $429 million unsecured loan backed by a $380 million federal loan guarantee provided by the ATSB. Certain third-party counter-guarantors have fully and unconditionally guaranteed the payment of an aggregate of $45 million of the outstanding principal amount under the loan partially guaranteed by the ATSB plus accrued and unpaid interest thereon. In addition, America West Holdings has fully and unconditionally guaranteed the payment of all principal, premium, interest and other obligations outstanding under the loan partially guaranteed by the ATSB and has pledged the stock of America West Airlines, Inc. to secure its obligations under such guarantee. Principal amounts under this loan become due in ten installments of $43 million on each March 31 and September 30, which commenced on March 31, 2004 and end on September 30, 2008. Principal amounts outstanding under the loan partially guaranteed by the ATSB bear interest at a rate per annum equal to LIBOR plus 40 basis points plus guarantee fees of approximately 8.0%.
 
For more information about the America West Holdings ATSB guaranteed loan, see America West Holdings’ filings on Form 10-Q and Form 10-K attached as Annexes B-1 and B-2 to this prospectus.
 
Amended and Restated ATSB Guaranteed Loans — On July 22, 2005, US Airways Group and America West Holdings announced that the ATSB approved the merger. Under the negotiated new loan terms, the US Airways, Inc. ATSB loan will be guaranteed by New US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and will be secured by substantially all of the present and future assets of New US Airways Group not otherwise encumbered, other than certain specified assets, including assets which are subject to other financing agreements. The America West Airlines, Inc. ATSB loan will also be guaranteed by New US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and will be secured by a second lien in the same collateral. The loans will continue to have separate repayment schedules and interest rates; however, the loans are subject to similar repayments and mandatory amortization in the event of additional debt issuances, with certain limited exceptions.
 
US Airways, Inc. must pay down the loan principal on the US Airways, Inc. ATSB loan in an amount equal to the greater of (i) the first $125 million of proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence and (ii) 60% of net proceeds from designated asset sales, provided that any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. The prior US Airways, Inc. ATSB loan agreement required repayment of 100% of all proceeds from any such asset sales. The pro forma balances do not reflect any potential pay downs of the loan principal that would be required upon completion of any contemplated asset sales. The guarantee fee on Tranche A of the US Airways, Inc. ATSB loan will be increased to 6.0%, from a current rate of 4.2% (before penalty interest assessed as a result of the current Chapter 11 proceedings). The interest rate on Tranche A will not change. The interest rate on Tranche B will be increased to the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR plus 4.0% (before penalty interest). The negotiated terms also reschedule amortization payments for US Airways, Inc. with semi-annual payments beginning on September 30, 2007, assuming repayment of proceeds from asset sales of $150 million, and continuing through September 30, 2010. The US Airways, Inc. ATSB loan’s prior final amortization was in October 2009.
 
The outstanding principal amount on the America West Airlines, Inc. ATSB loan is $300 million. The guarantee fee on the America West Airlines, Inc. ATSB loan will be 8.0% with annual increases of 5 basis points. The interest rate and scheduled amortization will not change. Voluntary prepayment of the America West Airlines, Inc. ATSB loan will require a premium in certain instances.
 
The terms of both amended and restated loans require New US Airways Group to meet certain financial covenants, including minimum cash requirements and required minimum ratios of earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges.
 
(c) US Airways Group and General Electric — General Electric and its affiliates, referred to collectively as GE, is US Airways Group’s largest aircraft creditor, having financed or leased a substantial portion of US Airways Group’s aircraft prior to the most recent Chapter 11 filing. In addition, in November 2001, US Airways, Inc. obtained a $404 million credit facility from GE, which was secured by collateral including 11 A320-family aircraft and 28 spare engines.

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In connection with the prior bankruptcy, US Airways Group reached a settlement with GE that resolved substantially all aircraft, aircraft engine and loan-related issues, and provided US Airways Group with additional financing from GE in the form of a liquidity facility of up to $360 million that bears interest at rate of LIBOR plus 4.25%. Most obligations of US Airways Group to GE are cross-defaulted to the 2001 GE credit facility, the 2003 GE liquidity facility, the GE regional jet leases and the GE regional jet mortgage financings.
 
In November 2004, US Airways Group reached a comprehensive agreement with GE and its affiliates, as described in a Master Memorandum of Understanding, or GE Master MOU, that was approved by the bankruptcy court on December 16, 2004. The GE Master MOU, together with the transactions contemplated by the term sheets attached to the GE Master MOU, provide US Airways Group with short-term liquidity, reduced debt, lower aircraft ownership costs, enhanced engine maintenance services and operating leases for new regional jets, while preserving the vast majority of US Airways Group’s mainline fleet owned or otherwise financed by GE. In connection with the merger, US Airways Group and America West Holdings have renegotiated certain of their respective existing agreements, and entered into new agreements, with GE. These agreements are set forth in a comprehensive agreement with GE and certain of its affiliates in a Master Merger Memorandum of Understanding, referred to as the GE Merger MOU, that was approved by the bankruptcy court in June 2005. In part, the GE Merger MOU modified and supplemented the agreements reached between US Airways Group and GE in the GE Master MOU, which was further amended by an amendment dated September 9, 2005. The amendment provided that, in lieu of the issuance to an affiliate of GE of a convertible note in the amount of $125 million, US Airways, Inc. would pay cash in the amount of $125 million.
 
The bridge facility entered into between US Airways Group and GE pursuant to the GE Master MOU on December 20, 2004 continued in effect during the pendency of the Chapter 11 cases. The bridge facility provided for a loan in the amount of up to approximately $56 million, which was drawn down by US Airways Group. The bridge facility bore interest at the rate of LIBOR plus 4.25% and matured on the date US Airways Group emerged from the Chapter 11 cases, and is payable in cash by September 30, 2005, as described below.
 
In June 2005, GE purchased the assets securing the 2001 credit facility in a sale-leaseback transaction. The sale proceeds realized from the sale-leaseback transaction were applied to repay the 2003 GE liquidity facility, the mortgage financing associated with the CRJ aircraft and a portion of the 2001 GE credit facility. The balance of the 2001 credit facility was amended to allow additional borrowings of $21 million in July 2005, which resulted in a total principal balance outstanding thereunder of approximately $28 million. The operating leases are cross-defaulted with all other GE obligations, other than excepted obligations, and are subject to agreed upon return conditions.
 
Pursuant to the GE Master MOU, as amended, US Airways Group agreed that following its emergence from the Chapter 11 cases, as partial consideration for amounts advanced under the bridge facility, forgiveness and release of US Airways, Inc. from certain prepetition obligations, deferral of certain payment obligations and amendments to certain maintenance agreements, an affiliate of GE will receive $125 million in cash by September 30, 2005.
 
For more information about the agreements between US Airways Group and GE, see the section entitled “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
 
America West Holdings and General Electric — On September 10, 2004, America West Airlines, Inc. entered into a term loan financing with GECC providing for loans in an aggregate amount of $111 million. The new term loan financing consists of two secured term loan facilities: (1) a $76 million term loan facility secured primarily by spare parts, rotables and appliances; and (2) a $35 million term loan facility secured primarily by aircraft engines and parts installed in such engines. The facilities are cross-collateralized on a subordinated basis and the collateral securing the facilities also secures on a subordinated basis certain of America West Airlines, Inc.’s other existing debt and lease obligations to GECC and its affiliates. Principal amounts outstanding under the loans bear interest at a rate per annum based on three-month LIBOR plus a margin. Both facilities contain customary events of default, including payment defaults, cross-defaults, breach of covenants, bankruptcy and insolvency defaults and judgment defaults. The America West Holdings GE term loan bears interest at a rate of LIBOR plus 3.95%.
 
For more information on America West Holdings’ arrangements with GE, see America West Holdings’ filings on Form 10-Q and 10-K attached as Annexes B-1 and B-2 to this prospectus.
 
(d) Airbus Term Loan — In connection with the merger, a Memorandum of Understanding, which we refer to as the Airbus MOU, was executed between ASVA S.A.R.L., an affiliate of Airbus Industrie G.I.E., which we refer to as Airbus, US Airways Group, US Airways, Inc. and America West Airlines, Inc. A key aspect of the Airbus MOU is that Airbus will provide a $250 million financing commitment upon the satisfaction of various conditions precedent, including the completion of the merger and the emergence of US Airways, Inc. from bankruptcy, of which $153 million is available to be drawn upon completion of the merger and used for general corporate purposes. We expect to have $250 million available by the end of 2006. This term loan will bear interest at a floating rate of interest with a margin subject to resets based on the credit rating of New US Airways Group.
 
For more information on the Airbus MOU, see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Statements” and “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
 
(e) Senior Secured Discount Notes — On December 27, 2004, America West Airlines, Inc. raised additional capital by financing its Phoenix maintenance facility and flight training center. The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier in 2004 when America West Airlines, Inc. refinanced its term loan. Using its leasehold interest in these two facilities as collateral, America West Airlines, Inc., through a wholly owned subsidiary named FTCHP LLC, raised $30.8 million through the issuance of senior secured discount notes. The notes bear interest at a rate of LIBOR plus 3.89%.

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(f) The Class B preferred stock of US Airways Group issued to Retirement Systems of Alabama Holdings LLC is subject to mandatory redemption on its maturity date of March 31, 2011 and is therefore classified as debt. These shares were cancelled pursuant to the debtors’ plan of reorganization.
 
(g) In July and August of 2003, America West Airlines, Inc. completed a private placement of approximately $87 million issue price of 7.25% Senior Exchangeable Notes due 2023. The notes bear cash interest at 2.49% per year until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing original issue discount daily at a rate of 7.25% per year starting in July 2009, until maturity. Each note was issued at a price of $343.61 and is exchangeable for Class B common stock of America West Holdings at an exchange ratio of 32.038 shares per $1,000 principal amount at maturity of the notes, subject to adjustment in certain circumstances. This represents an equivalent conversion price of approximately $10.73 per share. The aggregate amount due at maturity, including accrued original issue discount from July 31, 2008, will be $253 million. The notes are unconditionally guaranteed on a senior unsecured basis by America West Holdings.
 
(h) In connection with the closing of the ATSB guaranteed loan and the related transactions, America West Holdings issued $104.5 million of 7.5% convertible senior notes due 2009, of which approximately $112 million remained outstanding at June 30, 2005, including $22 million of interest paid through December 31, 2004 as a deemed loan added to the initial principal thereof. These notes are convertible into shares of Class B common stock of America West Holdings, at the option of the holders, at an initial conversion price of $12.00 per share or a conversion ratio of approximately 83.333 shares per $1,000 principal amount of such notes, subject to standard anti-dilution adjustments. Interest on the 7.5% convertible senior notes is payable semiannually in arrears on June 1 and December 1 of each year. At America West Holdings’ option, the first six interest payments were payable in the form of a deemed loan added to the principal amount of these notes. The 7.5% convertible senior notes will mature on January 18, 2009 unless earlier converted or redeemed. The payment of principal, premium and interest on the 7.5% convertible senior notes is fully and unconditionally guaranteed by America West Airlines, Inc.
 
(i) The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually on April 1 and October 1. The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.
 
(j) Promissory notes are due in 2005 and bear interest at rates of 4.35% to 4.58%.
 
(k) The Pro Forma Combined Stockholders’ Equity for New US Airways Group includes the new equity investments and America West Holdings’ current paid-in capital, partially offset by America West Holdings’ accumulated deficit. The Pro Forma As Adjusted Stockholders’ Equity reflects the sale of 8,500,000 shares of New US Airways Group common stock at an assumed offering price of $17.65 per share for aggregate proceeds of approximately $150 million, (excluding the underwriters’ discount and any proceeds from the possible exercise of the overallotment option by the underwriters). For historical Stockholders’ Equity information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.”
(l)  The number of shares issued and outstanding after the offering:
  •   excludes 4,205,009 shares of common stock reserved for issuance upon exercise of outstanding stock options held by employees and directors at a weighted average exercise price of $23.01 per share;
 
  •   excludes 8,122,682 shares of common stock reserved for issuance upon exercise of warrants at a weighted average exercise price of $7.27;
 
  •   excludes 5,606,196 shares of common stock issuable upon the repurchase of America West Airlines, Inc. 7.25% convertible notes, assuming repurchase of the convertible notes at a New US Airways Group share price of $15.68;
 
  excludes 3,860,162 shares of common stock reserved for issuance upon conversion of America West Holdings 7.5% convertible notes;
 
  •   excludes 6,060,606 shares of common stock reserved for issuance upon conversion of New US Airways Group convertible notes that may be issued in a concurrent private offering to qualified institutional buyers;
 
  •   excludes shares of common stock which may be issued pursuant to the exercise of grants and/or options under New US Airways Group’s stock option incentive plan; and
 
  •   excludes any shares that may be issued pursuant to the options to purchase additional shares of New US Airways Group common stock granted to ALPA under the plan of reorganization and to the new equity investors under the July 7, 2005 letter agreement and discussed in this prospectus.
(m) In connection with an amendment to the GE Merger MOU entered into as of September 9, 2005, US Airways, Inc. agreed to pay an affiliate of GE $125 million in cash by September 30, 2005. The payment to GE is expected to be funded through the issuance of $125 million of convertible notes in a separate private offering to qualified institutional buyers. There can be no assurance that the convertible notes will be issued, and if issued, that they will result in $125 million of proceeds. GE may, under certain circumstances, at GE’s option, request the issuance to GE of a $125 million convertible note in lieu of cash.
 
(n) In connection with resolving claims of the PBGC, US Airways, Inc. agreed to give the PBGC a $10 million note. The note bears interest at a rate of 6% per annum and interest will be paid annually. The note matures in 2012.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS OF NEW US AIRWAYS GROUP AND MANAGEMENT
      The following table sets forth certain information regarding the projected ownership of New US Airways Group common stock immediately following the merger and the completion of this offering by all projected beneficial owners of more than 5% of New US Airways Group common stock, based upon certain assumptions described in the notes below, as well as by each of our directors and named executive officers and by all of our directors and executive officers as a group. The following information does not include (i) any anti-dilution adjustments to the ATSB warrants to be implemented as a result of this offering in connection with the ATSB’s approval of the merger; (ii) any exercise of the underwriters’ overallotment option or (iii) any shares that may be issued upon the conversion of the convertible notes to be offered in a concurrent private offering to qualified institutional buyers.
      Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, each person identified in the table possesses voting and investment power with respect to all capital stock shown to be held by that person.
                         
        Percent of Class   Percent of Class
    Number of   Excluding 7.25%   Including 7.25%
Beneficial Owner   Shares   Notes (1)(3)(12)   Notes (2)(3)(12)
             
Wellington Management Company, LLP (4)
    11,090,900  (5)     15.8 %     14.6 %
75 State Street
                       
Boston, MA 02109
                       
 
Eastshore Aviation, LLC
    8,333,333       12.2 %     11.3 %
W6390 Challenger Drive,
                       
Suite 203
                       
Appleton, WI 54924
                       
 
Air Transportation Stabilization Board
    7,735,770  (6)     10.2 %     9.5 %
1120 Vermont Avenue
                       
Suite 970
                       
Washington, DC 20220
                       
 
Par Investment Partners, L.P.
    9,768,485  (7)     13.7 %     12.7 %
One International Place
                       
Suite 2401
                       
Boston, MA 02109
                       
 
ACE Aviation Holdings Inc. 
    6,000,000  (8)     8.7 %     8.0 %
5100 de Maisonneuve Boulevard West
                       
Montreal, Quebec, Canada H4A 3T2
                       
 
Peninsula Investment Partners, L.P. 
    4,000,000  (9)     5.8 %     5.4 %
404B East Main Street
                       
Charlottesville, VA 22902
                       
 
Pension Benefit Guaranty Corporation
    4,873,484   (10)     7.1 %     6.6 %
1200 K Street
                       
Washington, DC 20005-4026
                       
 
Tudor Investment Corp. (13)
    4,806,061   (11)     7.0 %     6.4 %
1275 King Street
                       
Greenwich, CT 06831
                       
 
W. Douglas Parker
    768,749  (14)     1.1 %     1.0 %
 
Bruce R. Lakefield
                 
 
Richard A. Bartlett
    8,333,333  (15)     12.2 %     11.3 %
 
Herbert M. Baum
    18,563  (16)     *       *  
 
Richard C. Kraemer
    39,304  (17)     *       *  
 
Cheryl G. Krongard
                 
 
Robert A. Milton
    6,000,000  (18)     8.7 %     8.0 %
 
Hans Mirka
                 
 
Denise M. O’Leary
    24,006  (19)     *       *  
 
George M. Philip
                 

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        Percent of Class   Percent of Class
    Number of   Excluding 7.25%   Including 7.25%
Beneficial Owner   Shares   Notes (1)(3)(12)   Notes (2)(3)(12)
             
 
Edward L. Shapiro
    9,768,485  (20)     13.7 %     12.7 %
 
Richard P. Schifter
    23,925  (26)     *       *  
 
J. Steven Whisler
    19,388 (21)     *       *  
 
Alan W. Crellin
                 
 
J. Scott Kirby
    228,113 (22)     *       *  
 
Jeffrey D. McClelland
    289,508 (23)     *       *  
 
C.A. Howlett
    156,144 (24)     *       *  
 
Derek J. Kerr
    121,069 (25)     *       *  
 
James E. Walsh III
    47,438 (26)     *       *  
 
Elise R. Eberwein
    32,175 (26)     *       *  
 
Directors and executive officers as a group (20 persons)
    25,870,200 (27)     35.0 %     32.5 %
 
   *    Less than 1%.
  (1)  Calculation of percent of class assumes that America West Airlines, Inc. 7.25% convertible notes are not converted to New US Airways Group common stock as a result of the merger.
 
  (2)  Calculation of percent of class assumes dilution from the conversion of the America West Airlines, Inc. 7.25% convertible notes at a New US Airways Group share price of $15.68 (representing 5.61 million shares).
 
  (3)  Calculated percentages are not additive. Percent of class ownership represented by holders of primary shares assumes no dilution when calculating the total shares. Calculation of percent of class ownership represented by holders of dilutive securities assumes that only the individual holder listed converts or exercises its option to purchase common stock of New US Airways Group; in these calculations, total shares used for the denominator includes only the sum of shares held by the individual holder after conversion plus all primary shares. The number of shares of common stock outstanding used in calculating the percentage for each listed person or entity includes common stock underlying options held by the person or entity that are exercisable within 60 days of the date of this prospectus or upon completion of this offering.
 
  (4)  Holder represents a group of investors under the management of Wellington Management Company, LLP, a Boston-based investment firm.
 
  (5)  Includes 9,090,900 shares held directly and 2,000,000 shares underlying stock options that are currently exercisable.
 
  (6)  Includes a warrant to purchase 7,735,770 shares of New US Airways Group common stock that is currently exercisable.
 
  (7)  Includes 6,768,485 shares held directly and 3,000,000 shares underlying stock options that are currently exercisable.
 
  (8)  Includes 5,000,000 shares held directly and 1,000,000 shares underlying stock options that are currently exercisable.
 
  (9)  Includes 3,333,333 shares held directly and 666,667 shares underlying stock options that are currently exercisable.
(10)  The plan of reorganization of the debtors provides that the PBGC will receive 70% of the 6,962,121 shares of New US Airways Group common stock to be issued to unsecured creditors of the debtors other than ALPA within five business days of the debtors’ emergence from bankruptcy.
 
(11)  Includes 3,939,394 shares held directly and 866,667 shares underlying stock options that are currently exercisable.
 
(12)  Assumes the sale of 8,500,000 shares of New US Airways Group common stock pursuant to this offering.
 
(13)  Includes Tudor Proprietary Trading, L.L.C. and a group of investors for which Tudor Investment Corp., a Connecticut-based asset management firm, acts as investment adviser.
 
(14)  Includes 20,061 shares held directly and 748,188 shares underlying stock options that are currently exercisable or will become exercisable on or prior to September 27, 2005. Excludes 206,250 shares underlying stock options that will not become exercisable on or prior to 60 days following September 27, 2005.
 
(15)  Includes the 8,333,333 shares held by Eastshore Aviation, LLC, as to which Mr. Bartlett shares voting and investment power. Mr. Bartlett disclaims beneficial ownership of the shares held by Eastshore Aviation, LLC except to the extent of his indirect pecuniary interest in the shares.
 
(16)  Includes 2,063 shares held directly and 16,500 shares underlying stock options that are currently exercisable or will become exercisable on or before September 27, 2005.
 
 
(17)  Includes 15,379 shares held directly and 23,925 shares underlying stock options that are currently exercisable or will become exercisable on or before September 27, 2005.

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(18)  Includes the 5,000,000 shares held by ACE Aviation Holdings Inc. and the 1,000,000 shares underlying stock options held by ACE Aviation Holdings Inc. that are currently exercisable. Mr. Milton is Chairman, President and Chief Executive Officer of ACE Aviation Holdings, Inc. Mr. Milton disclaims beneficial ownership of the shares held by ACE Aviation Holdings, Inc.
 
(19)  Includes 1,318 shares held directly and 22,688 shares underlying stock options that are currently exercisable or will become exercisable on or before September 27, 2005.
 
(20)  Includes 6,768,485 shares held by Par Investment Partners, L.P. and the 3,000,000 shares underlying stock options held by Par Investment Partners, L.P. that are currently exercisable, as to which Mr. Shapiro shares voting and investment power. Mr. Shapiro disclaims beneficial ownership of all of these shares.
 
(21)  Includes 413 shares held directly and 18,975 shares underlying stock options that are currently exercisable or will become exercisable on or before September 27, 2005.
 
(22)  Includes 4,125 shares held directly and 223,988 shares underlying stock options that are currently exercisable or will become exercisable on or prior to September 27, 2005, of which 2,475 stock options will be cancelled if not exercised prior to September 27, 2005.
 
(23)  Includes 8,250 shares held directly and 281,258 shares underlying stock options that are currently exercisable or will become exercisable on or prior to September 27, 2005.
 
(24)  Includes 2,694 shares held directly and 153,450 shares underlying stock options that are currently exercisable or will become exercisable on or before September 27, 2005.
 
(25)  Includes 1,650 shares held directly and 119,419 shares underlying stock options that are currently exercisable or will become exercisable on or prior to September 27, 2005.
 
(26)  Includes shares underlying stock options that are currently exercisable.
 
(27)  Includes 20,157,771 shares held directly, including the shares beneficially owned by Messrs. Bartlett, Milton and Shapiro, as to which beneficial ownership is disclaimed, and 5,712,429 shares underlying stock options that are currently exercisable or will become exercisable on or prior to September 27, 2005, of which 2,475 options will be cancelled if not exercised prior to September 27, 2005, and including the shares underlying options beneficially owned by Messrs. Milton and Shapiro, as to which beneficial ownership is disclaimed. Excludes 206,250 shares underlying stock options that will not become exercisable on or prior to September 27, 2005.

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PER SHARE MARKET PRICE DATA
      Our stock commenced trading on the NYSE under the symbol “LCC” on September      , 2005, and traded between a high of $          per share and a low of $          per share. The last reported share price was $          per share.
      In the merger, the America West Holdings Class B common stock was converted to New US Airways Group common stock at an exchange ratio of 0.4125. During the period between July 7, 2005, the date on which that exchange ratio was established pursuant to the letter agreement which amended the merger agreement, and the closing of the merger on the date of this prospectus, America West Holdings common stock traded between a high of $          per share and a low of $          per share.
      US Airways Group common stock immediately prior to the merger traded on the Nasdaq over-the-counter market under the symbol “UAIRQ.” The table below sets forth, for the periods indicated, the range of high and low per share sales prices for historical US Airways Group common stock, as discussed in more detail below. US Airways Group did not pay dividends during these periods.
      The historical price information of US Airways Group common stock does not reflect the price at which the New US Airways Group common stock will trade following the merger. Pursuant to the plan of reorganization, all equity securities of US Airways Group outstanding prior to confirmation of the plan of reorganization were cancelled. Therefore, it is not meaningful to determine the value or future trading ranges of one share of New US Airways Group common stock by reference to pre-merger trading values of US Airways Group common stock. As also discussed in more detail in this prospectus, various equity investors entered into agreements with US Airways Group and America West Holdings. These agreements were negotiated at arm’s length and value a share of New US Airways Group common stock at $15.00 or $16.50 per share, depending on the agreement. We cannot anticipate the price at which the New US Airways Group common stock will trade following the merger.
      Prior to US Airways Group’s 2002 bankruptcy proceedings and continuing through September 24, 2002, US Airways Group’s common stock was traded on the NYSE under the symbol “U.” On August 14, 2002, the NYSE announced that it would suspend trading and move to delist US Airways Group’s common stock. The SEC approved the delisting and the common stock was delisted effective September 25, 2002. As a result, on September 25, 2002, the common stock began trading on the Nasdaq over-the-counter market under the symbol “UAWGQ.” On March 31, 2003, in conjunction with the effective date of the 2003 plan of reorganization, all then-outstanding equity securities of the predecessor company were cancelled. The “predecessor company” refers to US Airways Group prior to March 31, 2003. On October 21, 2003, US Airways Group’s Class A common stock began trading on the Nasdaq National Market under the symbol “UAIR.” Prior to listing on the Nasdaq National Market, the Class A common stock had limited trading activity on the Over-the-Counter Bulletin Board and in the Pink Sheets, which provide trading for the over-the-counter securities markets. On September 13, 2004, US Airways Group received written notice from the Nasdaq Stock Market that the Class A common stock would be delisted in accordance with Marketplace Rules 4300 and 4450(f), effective with the opening of business on September 22, 2004. Nasdaq indicated in its letter that the delisting determination followed its review of US Airways Group’s press release announcing that the company had filed for bankruptcy protection. As a result of this notification, a fifth character “Q” was added to the trading symbol, changing it from “UAIR” to “UAIRQ” at the opening of business on September 15, 2004. Shares traded on the Nasdaq over-the-counter market under the symbol “UAIRQ” until the shares were cancelled pursuant to the plan of reorganization. US Airways Group’s Class B common stock had no public trading market and was held by one shareholder of record as of September 16, 2005.

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    US Airways Group
     
    High   Low
         
Fiscal Year 2002
               
 
First Quarter
  $ 7.60     $ 4.01  
 
Second Quarter
    6.76       2.20  
 
Third Quarter
    4.10       0.18  
 
Fourth Quarter
    0.69       0.10  
Fiscal Year 2003
               
 
First Quarter
    0.30       0.01  
     
 
Second Quarter (1)
    *       *  
 
Third Quarter
    32.00       4.00  
 
Fourth Quarter
    15.25       5.01  
Fiscal Year 2004
               
 
First Quarter
    6.77       4.11  
 
Second Quarter
    4.55       1.44  
 
Third Quarter
    3.16       0.58  
 
Fourth Quarter
    2.00       0.76  
Fiscal Year 2005
               
 
First Quarter
    1.31       0.69  
 
Second Quarter
    1.49       0.62  
 
Third Quarter (through September 16, 2005)
    0.77       0.15  
 
(1)  As a result of emergence from the prior bankruptcy, the predecessor company’s common stock was cancelled effective March 31, 2003. An established public trading market, defined as more than limited or sporadic trading, did not exist for the successor company Class A common stock until September 8, 2003. The successor company refers to US Airways Group on and after March 31, 2003, after giving effect to the cancellation of then-existing common stock and the issuance of new securities under the 2003 plan of reorganization, and the application of fresh-start reporting.
The following table presents the last reported sale price of a share of US Airways Group common stock, as reported on the over-the-counter market on May 18, 2005, the last full trading day prior to the public announcement of the merger, and on September      , 2005, the last practicable trading day prior to the date of this prospectus.
         
    US Airways Group
Date   Common Stock
     
May 18, 2005
  $ 0.77  
September   , 2005
  $    
      As noted above, because the previously outstanding securities of US Airways Group were cancelled pursuant to the plan of reorganization, the historical price information of US Airways Group common stock does not reflect the price at which our common stock will trade following the completion of this offering.

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NEW US AIRWAYS GROUP
      New US Airways Group will operate under the single brand name of US Airways through two principal operating subsidiaries US Airways, Inc. and America West Airlines, Inc. We expect to integrate the two operating subsidiaries into one operation over the following 24 months. As a result of the merger, we expect to be the fifth largest airline operating in the United States as measured by domestic revenue passenger miles and by ASMs. We expect to have primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Pittsburgh, Las Vegas, New York, Washington, D.C. and Boston. New US Airways Group will be a low-cost carrier offering scheduled passenger service on approximately 3,600 flights daily to 229 cities in the U.S., Canada, the Caribbean, Latin America and Europe. We will operate 360 mainline jets and will be supported by our regional airline subsidiaries and affiliates operating as US Airways Express, which will operate approximately 241 regional jets, of which 80 will be aircraft with 70 or more seats, and approximately 112 turboprops.
      We expect to have one of the most competitive cost structures in the airline industry due to cost cutting measures initiated by both companies over the last three years. US Airways Group’s restructuring activities in the debtors’ Chapter 11 bankruptcy proceedings specifically targeted cost reductions in four main areas. First, it has achieved important reductions in labor, pension and benefit costs resulting in ratified collective bargaining agreements, representing over $2 billion of annual cost savings. Second, it has put restructuring initiatives in place to reduce overhead, including reducing management payroll, and has re-vamped its schedule to improve aircraft utilization. Third, it has renegotiated various contractual obligations resulting in lower costs, including those related to aircraft, real estate and suppliers, and lowered catering costs. Lastly, US Airways Group rationalized its fleet through the elimination of older, less efficient aircraft, the introduction of large regional jet aircraft with low trip costs to better match capacity with demand, and the reduction of the number of mainline aircraft types it operates in order to lower maintenance, inventory and pilot training costs.
      Separately, America West Holdings has also been able to greatly reduce its operating expenses as a percentage of revenues since 2002. America West Holdings instituted programs to reduce management payroll, clerical payroll, travel agency based commissions, incentive programs and override commissions. It has reduced capital expenditures and discretionary expenses, and lowered catering costs. Other initiatives include increasing point-to-point flying at minimal additional costs using aircraft that would otherwise be parked at a gate, which increases daily utilization of aircraft.
      In addition to the cost saving initiatives already undertaken at the individual companies, we believe the combination of America West Holdings and US Airways Group will result in significant annual revenue and cost synergies of approximately $600 million that would be unachievable without completing the merger. These synergies derive from three principal sources. In anticipation of the merger, US Airways Group negotiated a reduction in its existing fleet so that the fleet of the combined company suits the expected network. New US Airways Group will be able to schedule the combined fleet to better match aircraft size with consumer demand. By scheduling the reduced fleet more efficiently and by adding new, low-fare service to Hawaii, we expect to create approximately $175 million in annual operating synergies. We also expect to realize annual cost synergies of approximately $250 million by reducing administrative overhead, consolidating our information technology systems and combining facilities. Lastly, by becoming one nationwide, low-cost carrier with a global reach that provides more choice for consumers and an improved ability to connect, we expect to realize approximately $175 million in additional annual revenue. There can be no assurance that we will be able to achieve these revenue, operating and cost synergies or that they can be achieved in a timely manner.
      US Airways Group and its subsidiaries prior to the merger employed approximately 29,400 people and America West Holdings and its subsidiaries prior to the merger employed approximately 14,000 people. After seniority lists have been integrated for each of the combined airlines’ unionized labor groups, we anticipate that a single labor contract will be applied to each of those groups.
      The combined airline is expected to operate a mainline fleet of 360 planes (supported by approximately 241 regional jets and approximately 112 turboprops that provide passenger feed into the mainline system),

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down from a total of 411 mainline aircraft operated by the two airlines as of June 30, 2005. US Airways Group projects removing 47 aircraft by the end of 2006. The combined airline is also expected to take delivery by the end of February 2006 of seven Airbus A320 family aircraft previously ordered by America West Airlines, Inc. Airbus has also agreed to reconfirm 30 narrow body A320-family aircraft deliveries and reschedule those deliveries from the 2006 to 2008 period to the 2009 to 2010 period. To rationalize international flying, the merged company anticipates working with Airbus to begin transitioning to an all-Airbus widebody fleet of A350 aircraft in 2011.
      We believe the merger will create one of the industry’s most financially stable airlines with approximately $1.5 billion in new liquidity coming from equity investments, this offering, new cash infusions from commercial partners, asset sales and the release of currently restricted cash.
      The $565 million of new equity investments has been provided by several investors. This offering will provide up to an additional $150 million of equity financing, or up to $172.5 million if the underwriters’ overallotment option is exercised in full, excluding the underwriters’ discount. In addition, the merged company is expected to receive over $700 million of cash infusions from commercial partners, including approximately $455 million from an affinity credit card partner and a $250 million line of credit to be provided by Airbus, and approximately $100 million from asset-based financings or sales of aircraft, net after prepayments of US Airways, Inc.’s loan partially guaranteed by the ATSB.
      For more information on these matters, see the sections entitled “The Plan of Reorganization,” and “The New Equity Investments” and “Unaudited Pro Forma Condensed Combined Financial Statements.”
Competitive Strengths of the Combined Company
      We believe that we will have a number of competitive strengths as a combined company, including:
      Largest U.S. Low-Cost Carrier with Nationwide Route Network. We expect to be the first national full-service low-cost carrier and the largest low-cost carrier by revenue passenger miles (including international service). We anticipate being the fifth largest airline operating in the United States as measured by domestic revenue passenger miles and by ASMs, with a national hub-and-spoke route network that will provide our customers with nationwide reach. We believe New US Airways Group will capture approximately 10% of all domestic revenue passenger miles. The combined company plans to continue as a member of the Star Alliance, the world’s largest airline alliance group.
      With our simplified pricing structure and international scope, we will offer competitive fare service to approximately 229 cities in the United States, Canada, the Caribbean, Latin America and Europe, making us the only low-cost carrier with a significant international route presence. Starting in December 2005, we expect to expand our route network to include Hawaii. We will be the only low-cost carrier with an established East Coast route network, including the US Airways Shuttle service, with substantial presence at capacity constrained airports like New York’s LaGuardia Airport and Washington, D.C.’s Ronald Reagan Washington National Airport.
      Offer Services Not Typical of Low-Cost Carriers. We believe that by delivering high-quality service, with greater frequency of flight departures and by offering our customers premium amenities not available on other low-cost carriers, we will provide the best value in our markets and create increased demand for our air travel services. We expect to be the only national low-cost carrier offering a global frequent flyer program, assigned seating, a First Class cabin, the US Airways Shuttle, online service to approximately 44 international destinations, convenient access to over 700 global destinations through our membership in the Star Alliance, and the convenience of our airport clubs. We expect that these amenities will differentiate our service from other low-cost carriers and will allow us to strengthen customer loyalty and attract new air travelers. We believe that our customers will continue to value our full service amenities and flight frequency, and that will help us to compete effectively with other low-cost carriers by providing our business oriented passengers with a premium product at a competitive price.
      Competitive Low-Cost Structure. We believe that the cost saving initiatives of both companies discussed above, coupled with the significant cost synergies from the combination, will allow us to have one

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of the most competitive cost structures in the airline industry. On a pro forma basis, once the anticipated merger synergies are realized, we expect that our costs, on a unit basis, will be approximately the same as those of America West Holdings before the merger. We believe that we will be able to compete effectively and profitably with this cost structure.
      Improved Balance Sheet with Substantial New Liquidity. We believe that we will be one of the industry’s most financially stable airlines. We expect New US Airways Group to realize approximately $10 billion in annual revenues and have as of the completion of the merger a strong balance sheet. The combined balance sheets will benefit from new liquidity of approximately $1.5 billion, which will include equity investments aggregating $565 million, the proceeds raised through this offering of approximately $150 million, or up to $172.5 million if the underwriters’ overallotment option is exercised in full, excluding the underwriters’ discount, cash infusions from commercial partners and other initiatives.
      Experienced Management Team. We benefit from an experienced, highly motivated combined management team. Our team is led by W. Douglas Parker, who has been the chief executive officer of America West Holdings since 2001 and prior to that served as chief operating officer from 2000 to 2001 and chief financial officer from 1995 to 2000. As chief executive officer, Mr. Parker led America West Holdings’ transformation into a low-cost carrier.
Business Strategy
      Our business strategy consists of the following:
      Provide Excellent Value to Our Customers. We plan to standardize customer service initiatives system-wide and provide a competitive, simplified pricing structure that we believe will provide our customers with an excellent value when compared to other low-cost carriers as well as legacy mainline carriers. We are committed to building a successful airline by taking care of our customers. We believe that our focus on excellent customer service in every aspect of operations, including personnel, flight equipment, in-flight and ancillary amenities, on-time performance, flight completion ratios and baggage handling, will strengthen customer loyalty, provide excellent value to our customers and attract new customers. Further, we believe that the amenities we provide our customers, such as a frequent flyer program, airport clubs, assigned seating and a First Class cabin, differentiates our product offering from other low-cost carriers.
      Continue to Reduce Our Operating Costs. New US Airways Group will focus on achieving cost reduction synergies that it expects to realize from the merger. Key areas where cost reductions can be achieved as a result of the merger include overhead costs, in-sourcing of information technology solutions where America West Holdings has existing capabilities, airport savings through better use of gates and employees in airports that both America West Holdings and US Airways Group serve today, and eliminating redundant facilities such as office space and hangars. We currently expect these initiatives to achieve approximately $250 million in annual savings once fully implemented. In addition, we also plan to increase aircraft use to increase flying and reduce unit costs.
      Leverage Our Broader Route Network and Rationalize Our Fleet. We expect to achieve annual savings of approximately $175 million from rationalizing our fleet, rescheduling our operations, and adding new, low-fare service to Hawaii. As a result of the merger, New US Airways Group plans to combine the current regional strengths of both America West Holdings on the West Coast and US Airways Group on the East Coast to provide a comprehensive product offering more attractive to customers. We also plan to make more efficient use of our nationwide network as a combined entity. New US Airways Group will be able to coordinate the schedules to and from the hubs and secondary hubs/focus cities of both airlines to create a significantly greater number of flight connections across the route network. Similarly we believe that we will be able to optimize the utilization of our aircraft and employees. For instance, aircraft of one airline that, before the merger, would have to sit idle awaiting the next scheduled departure could now be utilized along existing routes of the other airline to increase daily utilization.
      In anticipation of the merger, US Airways Group negotiated a reduction to its existing fleet so that the fleet of the combined company suits the expected route network and so that the introduction of new aircraft

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will be timed to coincide with the expiration of existing aircraft leases. We believe that we will also be able to reschedule the combined fleet to better match aircraft size with consumer demand. For example, in some markets that US Airways Group currently serves with a Boeing 737 aircraft, we expect to replace that service with a 90-seat regional jet that is currently operated in the America West Holdings’ system. In addition, we expect to place America West Holdings new aircraft into service on flights out of current US Airways Group hubs. Furthermore, we plan to initiate Boeing 757 aircraft service to Hawaii, which neither of us currently serves. These changes are expected to generate revenue benefits of approximately $175 million.
      Prudent Integration of America West Airlines, Inc. and US Airways, Inc. Operations. While management will move quickly to try to provide a seamless integration for consumers, we currently expect to achieve full labor and operational integration of America West Airlines, Inc. and US Airways, Inc. over a period estimated to be approximately 24 months. We believe that this timeframe will allow us to resolve the critical labor and systems issues necessary to achieve full integration. We plan to operate under a single brand name of US Airways while maintaining separate operating certificates for this period. We believe that the majority of the synergy value can be realized quickly through the rapid integration of routes, schedules, pricing, other marketing initiatives and overhead reductions.
Additional Information Regarding Projections of New US Airways Group
      The disclosure statement filed by the debtors with the bankruptcy court as part of their bankruptcy proceedings contains certain financial projections relating to the performance of New US Airways Group. These projections were developed in connection with the plan of reorganization for purposes of determining whether the debtors could satisfy their financial obligations while maintaining sufficient liquidity and capital resources to continue in business. Among other things, these projections contemplate that New US Airways Group will have a net loss in the fourth quarter of 2005 and full year 2006. The projections can be found in Appendix C of the disclosure statement but are not a part of this prospectus.
      Neither the debtors nor America West Holdings, as a matter of course, publish their business plans and strategies or projections or their anticipated financial position or anticipated results of operations. Accordingly, neither the debtors nor America West Holdings anticipate that they will, and disclaim any obligation to, furnish those projections or updated business plans or projections, or include such information in documents required to be filed with the SEC or otherwise make public such information. Although every effort was made to be accurate, the projections filed with the bankruptcy court were not prepared with a view toward compliance with the guidelines established by the American Institute of Certified Public Accountants or in accordance with accounting principles generally accepted in the United States of America or any other jurisdiction, the Financial Accounting Standards Board, or the rules and regulations of the SEC regarding projections. The projections have been prepared by, and are the responsibility of, the debtors’ and America West Holdings’ management. Neither KPMG LLP nor PricewaterhouseCoopers LLP has examined or compiled the projections and, accordingly, neither independent registered public accounting firm expresses an opinion or any other form of assurance with respect thereto. The reports of the independent registered public accounting firms included in this offering document relate to US Airways Group’s and America West Holdings’ historical financial information. They do not extend to the projections and should not be read to do so. While presented with numerical specificity, the projections are based on a variety of assumptions, which may not be realized, and which are subject to significant business, economic, and competitive uncertainties and contingencies, which are beyond the control of the debtors. Consequently, the projections should not be regarded as a representation or warranty by any of the debtors, or America West Holdings, or any other person, that the projections will be realized. Actual results may vary materially from those presented in the projections.

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MANAGEMENT
Directors
      The following individuals serve as our directors as of the date of this prospectus except for Richard A. Bartlett, Robert A. Milton and Edward L. Shapiro who have consented to begin service as our directors within two business days of the date of this prospectus. The terms of the initial Class I directors will expire at the time of the first annual meeting of the stockholders following the effective time of the merger, the terms of the initial Class II directors will expire at the time of the second annual meeting of the stockholders following the effective time of the merger, and the terms of the initial Class III directors will expire at the time of the third annual meeting of the stockholders following the effective time of the merger. Thereafter, directors elected to replace those whose terms have expired will be elected for a full-three year term.
      W. Douglas Parker, Age 43. Mr. Parker served as Chairman of the Board, President and Chief Executive Officer of America West Holdings and as Chairman of the Board and Chief Executive Officer of America West Airlines, Inc. since September 2001, and served as a director of America West Holdings since 1999. Mr. Parker joined America West Holdings as Senior Vice President and Chief Financial Officer in June 1995. He was elected Executive Vice President of America West Holdings and Executive Vice President — Corporate Group of America West Airlines, Inc. in April 1999. He was elected President of America West Airlines, Inc. in May 2000 and Chief Operating Officer of America West Airlines, Inc. in December 2000. Mr. Parker serves as Chairman of the board of directors and Chief Executive Officer of New US Airways Group as a Class III director.
      Bruce R. Lakefield, Age 61. Mr. Lakefield served as President and Chief Executive Officer of US Airways Group and US Airways, Inc. from April 2004 until completion of the merger and has served as a director of US Airways Group since 2003. Mr. Lakefield served as Chairman and Chief Executive Officer of Lehman Brothers International from 1995 until 1999. He has served as a Senior Advisor to the Investment Policy Committee of HGK Asset Management since 2000. Mr. Lakefield serves as a member of the Board of Directors of Magic Media, Inc. Mr. Lakefield serves as Vice Chairman of the board of directors of New US Airways Group as a Class III director.
      Richard A. Bartlett, Age 48. Mr. Bartlett serves as a managing director and principal of Resource Holdings Ltd., which is a merchant banking firm in New York City. Mr. Bartlett has worked at Resource Holdings Ltd. in various positions since 1985. Mr. Bartlett is also one of the owners of Eastshore Aviation, LLC. Mr. Bartlett serves on the board of several private companies, including Air Wisconsin Airlines Corporation, where he is a significant shareholder as well. Mr. Bartlett will serve as a member of the board of directors of New US Airways Group as a Class III director.
      Herbert M. Baum, Age 68. Mr. Baum retired as Chairman of the Board, President and Chief Executive Officer of the Dial Corporation, a manufacturer and marketer of consumer products, in April 2005. Mr. Baum has served as a director of America West Holdings since 2003. Mr. Baum served as President and Chief Operating Officer of Hasbro, Inc., a manufacturer and marketer of toys, from January 1999 to August 2000. Mr. Baum also served as Chairman and Chief Executive Officer of Quaker State Corporation, a producer and marketer of motor oils and lubricants, from 1993 to 1999. From 1978 to 1992, Mr. Baum was employed by Campbell Soup Company, a manufacturer and marketer of food products, and, in 1992, was named President of Campbell — North and South America. Mr. Baum also is a director of Action Performance Companies, Inc., The Dial Corporation, Meredith Corporation, PepsiAmericas, Inc. and Playtex Products. He also serves on the board of directors of the International Swimming Hall of Fame. Mr. Baum serves as a member of the board of directors of New US Airways Group as a Class I director.
      Richard C. Kraemer, Age 62. Mr. Kraemer is President of Chartwell Capital, Inc., a private investment company, and has served as a director of America West Holdings since 1992. From October 1985 until March 1996 he served as President of UDC Homes Inc. Mr. Kraemer also served as a director of UDC from 1980 until March 1996 and as its Chief Executive Officer from October 1994 until March 1996. Mr. Kraemer serves as a member of the board of directors of New US Airways Group as a Class I director.

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      Cheryl G. Krongard, Age 49. Ms. Krongard retired in 2004 as a Senior Partner of Apollo Management, L.P. Ms. Krongard was the Chief Executive Officer of Rothschild Asset Management from 1994 to April 15, 2000. She served as Senior Managing Director for Rothschild North America from 1994 until 2000. She serves on the board of directors of the Iowa State University Foundation and is a lifetime governor elected in 1997. She is also chairperson of the Investment Committee for the Iowa State University Foundation. Ms. Krongard is also a member of the Dean’s Advisory Council, Iowa State University College of Business, and a Trustee of the Mount Sinai Medical Center. Ms. Krongard also serves as a Director of the City Meals on Wheels and Educate, Inc., a publicly traded company engaged in tutoring and learning (formerly Sylvan Learning). Ms. Krongard has served as a director of US Airways Group and US Airways, Inc. since 2003. Ms. Krongard serves as a member of the board of directors of New US Airways Group as a Class I director.
      Robert A. Milton, Age 45. Mr. Milton has served as Chairman, President and Chief Executive Officer of ACE Aviation Holdings Inc., ACE, since September 2004. ACE is the parent holding company under which the reorganized Air Canada and separate legal entities such as Aeroplan, Air Canada Jazz, Air Canada Technical Services, Air Canada Cargo, Air Canada Groundhandling, Destina.ca and Touram (Air Canada Vacations) are held. Mr. Milton, who is also Chairman of Air Canada, held the position of President and Chief Executive Officer of Air Canada from August 1999 until December 2004. Mr. Milton joined Air Canada in 1992 on a consulting basis. He was appointed as Executive Vice President and Chief Operating Officer of Air Canada in 1996. Mr. Milton was a director and the Chief Executive Officer of Air Canada when it applied for and received ancillary relief under section 304 of the U.S. bankruptcy code in respect of reorganization proceedings under Canadian law on April 1, 2003. Air Canada emerged from these proceedings on September 30, 2004. Prior to joining Air Canada he was a founding partner in Air Eagle Holdings Inc. and an independent commercial aviation consultant to British Aerospace. Mr. Milton has served as Chair of the International Air Transport Association’s Board of Governors since June 2005. Mr. Milton will serve as a member of the board of directors of New US Airways Group as a Class III director.
      Hans Mirka, Age 68. Mr. Mirka served as Senior Vice President, International Division for American Airlines, Inc. from 1992 until his retirement in 1998. He also served as Executive Vice President and General Manager for Pan American World Airways, Inc. from 1984 until 1989 and Vice President, Field Sales and Services for Continental Airlines until 1984. Mr. Mirka has served as a director of US Airways Group and US Airways, Inc. since 2003. Mr. Mirka serves as a member of the board of directors of New US Airways Group as a Class I director.
      Denise M. O’Leary, Age 48. Ms. O’Leary has been a private investor in early stage companies since 1996 and has served as a director of America West Holdings since 1998. From 1983 until 1996, she was employed at Menlo Ventures, a venture capital firm, first as an Associate and then as a General Partner. Ms. O’Leary serves as a director of Chiron Corporation and Medtronic, Inc. Additionally, she is a member of the Board of Trustees of Stanford University and Chair of the Board of Directors of Stanford Hospital and Clinics. Ms. O’Leary serves as a member of the board of directors of New US Airways Group as a Class II director.
      George M. Philip, Age 58. Mr. Philip has served as the Executive Director of the New York State Teachers’ Retirement System since 1995. He has also served as Chief Investment Officer of the New York State Teachers’ Retirement System since 1992. Mr. Philip served as the Assistant Executive Director of the New York State Teachers’ Retirement System from 1992-1995 and as Chief Real Estate Investment Officer from 1988-1992. Mr. Philip has served in various positions with the New York State Teachers’ Retirement System from 1971. Mr. Philip is the past President of the Executive Committee of the National Council on Teacher Retirement. He also served as past Chair of the Council of Institutional Investors. Mr. Philip also serves as Chair of the University of Albany Council, Vice Chair of the St. Peter’s Hospital Board of Directors, Chair of the Catholic Health East Investment Committee, and Chair of the St. Peter’s Hospital Investment Committee. Mr. Philip serves on the NYSE Pension Managers Advisory Committee and the State Academy of Public Administration. He is a past member of the Board of Directors of the Saratoga Performing Arts Center. Mr. Philip has served as a director of US Airways Group and US Airways, Inc. since

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2004. Mr. Philip serves as a member of the board of directors of New US Airways Group as a Class II director.
      Richard P. Schifter, Age 51. Mr. Schifter is a partner of Texas Pacific Group, an investment firm that he joined in July 1994, and has served as a director of America West Holdings since 1994. Mr. Schifter also is a Managing Partner of Newbridge Latin America Fund, L.P., a private equity fund. Mr. Schifter serves as a director of Gate Gourmet, Grupo Milano, S.A., Bristol Group, Productora de Papel, S.A. de C.V. (Proposa), Empresas Chocolates La Corona, S.A. de C.V. (La Corona) and Diveo Broadband Networks, Inc. Mr. Schifter serves as a member of the board of directors of New US Airways Group as a Class II director.
      Edward L. Shapiro, Age 40. Mr. Shapiro is a Vice President and partner at PAR Capital Management. He joined PAR Capital Management in 1997. Mr. Shapiro served as Vice President of Wellington Management Company from 1990 to 1997. Mr. Shapiro has served as a member of the Board of Directors of Cebridge Communications, a private cable system operator, since January 2003 and Legend Films, a private film colonization company, since 2004. Mr. Shapiro also has served on the Children’s Hospital Boston Trust Board since November 2004. Mr. Shapiro will serve as a member of the board of directors of New US Airways Group as a Class III director.
      J. Steven Whisler, Age 50. Mr. Whisler is Chairman and Chief Executive Officer of Phelps Dodge Corporation, a mining and manufacturing company, and has served as a director of America West Holdings since 2001. Mr. Whisler has served as Chairman of Phelps Dodge since May 2000 and as Chief Executive Officer since January 2000. He served as President from December 1997 until November 2003. From December 1997 until January 2000, Mr. Whisler served as Chief Operating Officer of Phelps Dodge. From 1991 until 1998. Mr. Whisler served as President of Phelps Dodge Mining Company, a division of Phelps Dodge. Mr. Whisler serves as a director of Phelps Dodge and Burlington Northern Santa Fe Corporation. Mr. Whisler serves as a member of the board of directors of New US Airways Group as a Class II director.
Committees of the Board of Directors
      The board of directors has established the following standing committees:
      Audit Committee. The audit committee oversees our internal accounting function and oversees and reports to the board of directors with respect to other auditing and accounting matters, including the selection of our independent auditors, the scope of annual audits, fees to be paid to our independent auditors and the performance of our independent auditors. The audit committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act.
      Compensation and Human Resources Committee. The compensation and human resources committee reviews and approves the compensation for our executive officers. The compensation and human resources committee also administers our equity incentive plan and other employee benefit plans.
      Corporate Governance and Nominating Committee. The corporate governance and nominating committee oversees all aspects of our corporate governance functions on behalf of the board of directors, including identifying individuals qualified to become board members, recommending to the board the selection of director nominees, reviewing and assessing our Corporate Governance Guidelines and overseeing the monitoring and evaluation of our corporate governance practices. The committee’s role includes oversight of the procedures for compliance with significant applicable legal, ethical and regulatory requirements that impact corporate governance.
      Finance Committee. The finance committee assists the board of directors through oversight of our financial affairs, and recommends to the board of directors financial policies and courses of action, including operating and capital budgets, to accommodate our goals and operating strategies while maintaining a sound financial condition.
      Labor Committee. The labor committee meets with representatives of our labor organizations to discuss issues, ideas and concerns related to the labor organizations.

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Director Compensation
      We pay each of our non-employee directors an annual fee of $20,000, paid quarterly, for each fiscal year in which they serve as a director, and a fee of $1,000 for each board or committee meeting attended. Committee chairpersons also receive an additional annual fee of $4,000 per year, except that the audit committee chairperson’s annual fee is $10,000. Non-employee directors also receive an initial grant and annual grant of stock options to purchase 4,125 shares of New US Airways Group common stock under our equity incentive plan, as described in more detail in the section entitled “— Executive Compensation — 2005 Equity Incentive Plan” below. Each of our non-employee directors and director’s spouse and the director’s dependent children, as well as a limited number of non-eligible family members or other persons, also receives free travel privileges on US Airways, including reimbursement for federal and state income taxes incurred by the director on that travel. We also reimburse our directors for out-of-pocket expenses incurred in connection with attending meetings.
Executive Officers
      The following table sets forth information regarding our executive officers as of the date of this prospectus:
         
Name   Age   Position
         
W. Douglas Parker
  43   Chairman of the Board, President and Chief Executive Officer and
  Director
Alan W. Crellin
  58   Executive Vice President — Operations
J. Scott Kirby
  38   Executive Vice President — Sales and Marketing
Jeffrey D. McClelland
  46   Executive Vice President and Chief Administrative Officer
C.A. Howlett
  61   Senior Vice President — Public Affairs
Derek J. Kerr
  40   Senior Vice President and Chief Financial Officer
James E. Walsh III
  57   Senior Vice President and General Counsel
Elise R. Eberwein
  40   Vice President — Corporate Communications
      New US Airways Group Officers. In addition to W. Douglas Parker, the following individuals serve as our executive officers:
      Alan W. Crellin, Age 58. Mr. Crellin joined US Airways Group in 1988 as a result of the acquisition of Pacific Southwest Airlines. He was promoted to serve as Vice President — Ground Services of US Airways Group in 1995. Mr. Crellin served as Senior Vice President — Customer Service of US Airways Group from 2000 until his election as Executive Vice President — Operations of US Airways Group and US Airways, Inc. in January 2002. Prior to joining US Airways Group, Mr. Crellin held a variety of management positions with Pacific Southwest Airlines from 1971 to 1988, including Vice President — Customer Service. Mr. Crellin is responsible for operations, including safety, flight operations, maintenance, airports and inflight services at New US Airways Group, and retains his title of Executive Vice President — Operations.
      J. Scott Kirby, Age 38. Mr. Kirby joined America West Airlines, Inc. as Senior Director — Schedules and Planning in October 1995. In October 1997, Mr. Kirby was elected to the position of Vice President — Planning and in May 1998, he was elected to the position of Vice President — Revenue Management. In January 2000, he was elected to the positions of Senior Vice President — E-Business and Technology of America West Airlines, Inc. He was elected as Executive Vice President — Sales and Marketing of America West Airlines, Inc. in September 2001. He is responsible for revenue management, information technologies, scheduling/planning, marketing, sales, alliances, distribution and reservations at New US Airways Group, and retains his title of Executive Vice President — Sales and Marketing.
      Jeffrey D. McClelland, Age 46. Mr. McClelland joined America West Airlines, Inc. as Senior Vice President — Operations in September 1999. He was elected Executive Vice President — Operations in September 2001 and was elected Executive Vice President and Chief Operating Officer in November 2002.

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From 1991 until 1999, Mr. McClelland worked at Northwest Airlines, most recently as Senior Vice President — Finance and Controller. He is the Executive Vice President and Chief Administrative Officer at New US Airways Group.
      C.A. Howlett, Age 61. Mr. Howlett joined America West Airlines, Inc. as Vice President — Public Affairs in January 1995. On January 1, 1997, he was elected Vice President — Public Affairs of Holdings. He was elected as Senior Vice President — Public Affairs of America West Airlines, Inc. and America West Holdings in February 1999, and retains his title at New US Airways Group.
      Derek J. Kerr, Age 40. Mr. Kerr joined America West Airlines, Inc. as Senior Director — Financial Planning in April 1996. He was elected to the position of Vice President — Financial Planning and Analysis in May 1998. In February 2002, Mr. Kerr was elected Senior Vice President — Financial Planning and Analysis. He was elected as Senior Vice President and Chief Financial Officer of America West Airlines, Inc. and America West Holdings in September 2002 and retains his title at New US Airways Group.
      James E. Walsh III, Age 57. Mr. Walsh joined America West Airlines, Inc. as Senior Vice President and General Counsel of America West Airlines, Inc. in August 2004. Prior to joining America West Airlines, Inc., Mr. Walsh was Senior Vice President and General Counsel of Fairchild Dornier Corporation. Prior to joining Fairchild in 1991, Mr. Walsh spent 12 years at American Airlines in various positions including Vice President of Purchasing & Inventory Control and later Vice President of Law. He retains his title as Senior Vice President and General Counsel at New US Airways Group.
      Elise R. Eberwein, Age 40. Ms. Eberwein joined America West Airlines, Inc. in September 2003 as Vice President — Corporate Communications of America West Airlines, Inc. Prior to joining America West Airlines, Inc., Ms. Eberwein held various communication positions for three other airlines, including Denver-based Frontier Airlines where she served as Vice President, Communications from 2000 until she joined America West Airlines, Inc. She retains her title as Vice President — Corporate Communications at New US Airways Group.
Executive Compensation
2005 Equity Incentive Plan
     General
      The New US Airways Group equity incentive plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, stock purchase awards, stock bonus awards, stock unit awards, and other forms of equity compensation (including performance-based stock awards), which we collectively refer to as stock awards, as well as performance-based cash awards. Incentive stock options may be granted under the equity incentive plan only to employees (including officers) of New US Airways Group and its affiliates. Employees (including officers) of and consultants to New US Airways Group and its affiliates, and non-employee directors of New US Airways Group, are eligible to receive all other types of stock awards under the equity incentive plan. No person may be granted stock options or stock appreciation rights covering more than 1,000,000 shares of New US Airways Group common stock during any calendar year.
      The board of directors of New US Airways Group, Inc. (or a committee or committees thereof) will administer the equity incentive plan. Subject to the provisions of the equity incentive plan, the board of directors has the authority to construe and interpret the equity incentive plan, and to determine the recipients, grant dates, number of shares of New US Airways Group common stock to be subject to each stock award, and the terms and conditions of each stock award, including the vesting and exercisability period of the award, the exercise, purchase, or strike price of the award, and the type of consideration permitted to exercise or purchase the award. The board of directors also may accelerate the date on which any stock award vests or becomes exercisable.
      A maximum of 12.5% of the fully-diluted shares, as of the completion of the merger, of New US Airways Group common stock is available for issuance under the equity incentive plan, any or all of

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which may be issued pursuant to incentive stock options. Shares of New US Airways Group common stock issued under the equity incentive plan may be unissued shares or reacquired shares, purchased on the open market or otherwise.
      The number of shares of New US Airways Group common stock available for issuance under the equity incentive plan will be reduced by (i) one share for each share of stock issued pursuant to a stock option or a stock appreciation right, and (ii) three shares for each share of stock issued pursuant to a stock purchase award, stock bonus award, stock unit award and other such full-value types of stock awards. Stock awards that are terminated, forfeited or repurchased from the New US Airways Group equity incentive plan or the America West Holdings 2002 Incentive Equity Plan will result in an increase in the share reserve of the equity incentive plan in an amount corresponding to the reduction originally made in respect of the award.
     Options
      The exercise price of incentive stock options may not be less than 100% of the fair market value of the stock subject to the option on the date of grant and, in some cases (see “Eligibility” above), may not be less than 110% of such fair market value. The exercise price of nonstatutory stock options may not be less than 100% of the fair market value of the stock on the date of grant.
      Options granted under the equity incentive plan may become exercisable in cumulative increments, or “vest,” as determined by the board of directors. Vesting typically will occur during the optionholder’s continued service with New US Airways Group or an affiliate, whether that service is performed in the capacity of an employee, consultant or director, and regardless of any change in the capacity of the service performed. Options granted under the equity incentive plan may permit exercise prior to vesting. However, any unvested shares acquired under such an early exercise arrangement will be subject to repurchase by New US Airways Group, should the participant’s service terminate before vesting.
      Options granted under the equity incentive plan generally terminate three months after termination of the participant’s service unless (i) termination is due to the participant’s death (or the participant dies within a specified time after termination of service), disability or retirement (as defined in the equity incentive plan), in which case the options may be exercised (to the extent they were exercisable at the time of the termination of service) at any time within three years following termination, (ii) the participant’s service is terminated for cause (as defined in the equity incentive plan), in which case the options will terminate upon the participant’s termination of service, or (iii) otherwise provided in the participant’s option agreement or employment agreement. In no event, however, may an option be exercised beyond the expiration of its term.
     Options Granted to Non-Employee Directors
      Non-employee directors automatically will be granted initial and annual nonstatutory options under the equity incentive plan without any board of directors action when the criteria for these grants are met. The board of directors may at any time, however, modify, amend or otherwise change the terms of the options to be granted to non-employee directors under the equity incentive plan. Each person who is appointed or elected for the first time to be a non-employee director on or after January 1, 2006 automatically will receive, at the time of his or her initial election to the board of directors, an option to purchase 4,125 shares of New US Airways Group common stock. Each non-employee director automatically will receive an additional option to purchase 4,125 shares of New US Airways Group common stock on the date of each annual meeting of the stockholders of New US Airways Group, commencing with the first such annual meeting after January 1, 2006. This grant will be reduced, however, on a pro rata basis, for each month that person did not serve as a non-employee director during the twelve-month period preceding the annual grant date.
      The options granted to non-employee directors will be fully vested and exercisable on the date of grant.
      If a non-employee director’s service terminates, the options granted to that director will terminate three months after termination of service, except that, subject to the maximum ten-year term of the options, (i) if termination is due to death, disability, retirement (as defined in the equity incentive plan) or a change in control (as defined in the equity incentive plan), options will remain exercisable for three years.

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      Each initial and annual grant will be in the form of a stock option, except that it may be in the form of full value shares or stock units if the board of directors makes such a determination on or before December 31 of the prior calendar year. In that case, in lieu of an option, each director will receive a grant of full value shares or stock units for that number of shares determined by dividing the “fair value” (generally the Black-Scholes value) of an option to purchase 4,125 shares (or the reduced number of shares) by the New US Airways Group common stock’s then current fair market value.
     Stock Appreciation Rights
      Each stock appreciation right is denominated in shares of New US Airways Group common stock equivalents. Upon exercise of a stock appreciation right, New US Airways Group will pay the participant an amount equal to the excess of (i) the aggregate fair market value of New US Airways Group common stock on the date of exercise, over (ii) the strike price, which will be determined by the board of directors on the date of grant, but which may not be less than 100% of the fair market value of the stock on the date of grant.
      Stock appreciation rights vest and become exercisable at the rate specified in the stock appreciation right agreement as determined by the board of directors.
      Upon termination of a participant’s service, the participant generally may exercise any vested stock appreciation right for three months (or such longer or shorter period specified in the stock appreciation right agreement) after the date that service relationship ends. In no event may a stock appreciation right be exercised beyond the expiration of its term.
     Stock Purchase Awards and Stock Bonus Awards
      The purchase price for stock purchase awards must be at least the par value of New US Airways Group common stock. To the extent consistent with applicable law, the board of directors may grant stock bonus awards in consideration for past or future services rendered to New US Airways Group or in exchange for any other form of legal consideration acceptable to the board of directors, without the payment of a purchase price. Shares of stock acquired under a stock purchase or stock bonus award may, but need not, be subject to a repurchase option in favor of New US Airways Group or forfeiture to New US Airways Group in accordance with a vesting schedule as determined by the board of directors. The board of directors has the authority to accelerate the vesting of stock acquired pursuant to a stock purchase or stock bonus award.
      Upon termination of a participant’s service, New US Airways Group may repurchase or otherwise reacquire any forfeited shares of stock that have not vested as of that termination under the terms of the applicable stock purchase award or stock bonus award agreement.
     Stock Unit Awards
      The purchase price, if any, for stock unit awards may be paid in any form of legal consideration acceptable to the board of directors.
      Stock unit awards vest at the rate specified in the stock unit award agreement as determined by the board of directors. However, at the time of grant, the board of directors may impose additional restrictions or conditions that delay the delivery of stock, cash or other consideration subject to the stock unit award after vesting.
      Except as otherwise provided in the applicable award agreement, stock units that have not vested will be forfeited upon the participant’s termination of service.
     Other Equity Awards
      The board of directors may grant other equity awards that are valued in whole or in part by reference to New US Airways Group common stock. Subject to the provisions of the equity incentive plan, the board of directors has the authority to determine the persons to whom and the dates on which such other equity awards

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will be granted, the number of shares of New US Airways Group common stock (or cash equivalents) to be subject to each award, and other terms and conditions of such awards.
     Performance-Based Awards
      Under the equity incentive plan, a stock or cash award may be granted, vest or be exercised based upon the attainment during a certain period of time of certain performance goals. All employees of and consultants to New US Airways Group and its affiliates and directors of New US Airways Group are eligible to receive performance-based awards under the equity incentive plan. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by the board of directors. The performance goals will be based upon one or more pre-established criteria enumerated in the equity incentive plan. With respect to performance-based stock awards (other than stock options and stock appreciation rights), no individual may receive awards covering more than 1,000,000 shares during any calendar year. With respect to performance-based cash awards, no individual may receive an award greater than $5,000,000 during any calendar year.
     Changes to Capital Structure
      If any change is made to the outstanding shares of New US Airways Group common stock without New US Airways Group’s receipt of consideration (whether through a stock split or other specified change in the capital structure of New US Airways Group), appropriate adjustments will be made to: (i) the maximum number and/or class of securities issuable under the equity incentive plan, (ii) the maximum number and/or class of securities for which any one person may be granted options and/or stock appreciation rights or performance-based stock awards per calendar year, and (iii) the number and/or class of securities and the price per share in effect under each outstanding stock award under the equity incentive plan.
     Corporate Transactions; Changes in Control
      Under the equity incentive plan, unless otherwise provided in a written agreement between New US Airways Group or any affiliate and the holder of the stock award, in the event of a corporate transaction (as specified in the equity incentive plan), any or all outstanding stock awards under the equity incentive plan may be assumed, continued or substituted for by any surviving or acquiring entity (or its parent company) and any reacquisition or repurchase rights held by New US Airways Group with respect to stock awards may be assigned to the surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute for such stock awards, then (i) with respect to any such stock awards that are held by individuals whose continuous service with New US Airways Group or its affiliates has not terminated prior to the effective date of the corporate transaction, the vesting and exercisability provisions of the stock awards will be accelerated in full and such awards will terminate if not exercised prior to the effective date of the corporate transaction, and any reacquisition or repurchase rights held by New US Airways Group will lapse, and (ii) with respect to any other stock awards, the vesting and exercisability provisions of those stock awards will not be accelerated and the awards will terminate if not exercised prior to the effective date of the corporate transaction (except that any reacquisition or repurchase rights held by New US Airways Group with respect to such stock awards will not terminate and may continued to be exercised notwithstanding the corporate transaction). In the event a stock award will terminate if not exercised, the board of directors may provide, in its sole discretion, that the holder of that stock award will receive a payment, in lieu of exercise, equal to the excess of the value of the property the holder would have received upon exercise over any exercise price.
      Other acceleration may be provided in individual stock award agreements or employment agreements based upon the occurrence of a corporate transaction (as defined in the plan) or other events, such as death, disability or a transaction constituting a change in control, all as set forth in an individual award or employment agreement.

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     Duration, Termination and Amendment
      The board of directors may suspend or terminate the equity incentive plan without stockholder approval or ratification at any time. Unless sooner terminated, the equity incentive plan will terminate ten years after final approval by the bankruptcy court.
      The board of directors may amend or modify the equity incentive plan at any time. However, no amendment will be effective unless approved by the stockholders of New US Airways Group, to the extent stockholder approval is necessary to satisfy applicable law.
      The board of directors may not, without obtaining the prior approval of New US Airways Group’s stockholders, reduce the exercise price of any outstanding option under the equity incentive plan, cancel any outstanding option under the equity incentive plan and grant a new option, other stock award or other consideration in substitution or exchange therefor, or conduct any other action that is treated as a repricing under generally accepted accounting principles.
Employment and Other Executive Agreements
Executive Incentive Awards in Connection with the Merger
      On August 4, 2005, Mr. Parker was granted options to purchase an aggregate of 500,000 shares of America West Holdings Class B common stock under the America West Holdings 2002 Incentive Equity Plan. The options have an exercise price of $8.65 per share, the fair market value of America West Holdings Class B common stock on the date of grant, and a ten year term and, subject to acceleration as described below, and will vest as to 50% of the options on the second anniversary of the effective time of the merger and as to 25% on each of the third and fourth anniversaries of the effective time of the merger. In connection with the merger, each option was converted into an option to purchase the number of shares of New US Airways Group common stock that is equal to the product of the number of shares of America West Holdings common stock that could have been purchased before the merger upon exercise of the option multiplied by 0.4125 and rounded to the nearest whole share, at an exercise price per share equal to the exercise price per share of the option immediately prior to the merger divided by 0.4125.
      In connection with the transactions contemplated by the merger agreement and to provide incentives for the senior executive team to continue to work for the success of New US Airways Group, the compensation committee of the board of directors of America West Holdings and other parties as required by the merger agreement approved an incentive plan for America West Holdings’ executive officers who are now executive officers of New US Airways Group, including Mr. Parker. The incentive plan also applies to certain executive officers of US Airways Group with equivalent ranks who are now executive officers of New US Airways Group, and the bankruptcy court approved it as part of the plan of reorganization. The various components of the incentive plan are as follows:
  •  Effective upon the completion of the merger, stock appreciation rights were granted pursuant to New US Airways Group’s equity incentive plan as follows: Mr. Parker, 196,000; each executive vice president, 165,000; and each senior vice president, 51,500. Each stock appreciation right represents the right to receive the value of appreciation of one share of New US Airways Group common stock in excess of the fair market value of such share on the date of grant. Subject to acceleration as described below, 50% of the stock appreciation rights granted upon the completion of the merger will vest on the second anniversary of the effective time of the merger and 25% will vest on each of the third and fourth anniversaries of the effective time of the merger. The stock appreciation rights will be exercisable after vesting for a period of 10 years from the date of grant.
 
  •  Effective upon the completion of the merger, Mr. Parker was granted 41,250 restricted stock units pursuant to New US Airways Group’s equity incentive plan. Each restricted stock unit represents the right to receive one share of New US Airways Group common stock if and when the restricted stock unit vests. Subject to acceleration as described below, 50% of the restricted stock units granted to Mr. Parker will vest on the second anniversary of the effective time of the merger and 25% will vest on each of the third and fourth anniversaries of the effective time of the merger.

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  •  Effective upon completion of the merger, restricted stock units were granted pursuant to New US Airways Group’s equity incentive plan as follows: Mr. Parker, 20,625; each executive vice president, 10,300; and each senior vice president, 3,200; the restricted stock units provide that the restricted stock units will not vest and no underlying shares will be issued unless the operating certificates of both airlines have been combined within three years after the effective time of the merger. Subject to acceleration as described below and the restrictions described above, 50% of the restricted stock units will vest on each of the third and fourth anniversaries of the effective time of the merger.
 
  •  Other than with respect to restricted stock unit awards the vesting of which is conditioned upon combination of the operating certificates of both airlines, the vesting of each award described above will be accelerated if the executive who holds such award is terminated by New US Airways Group without cause or by reason of death or disability, if the executive terminates his or her employment for good reason or if the executive is terminated involuntarily within 24 months of a subsequent change in control of New US Airways Group.
 
  •  In consideration for the awards granted to him and the other senior executives under the incentive plan and for the options to purchase 500,000 shares of America West Holdings Class B common stock described above, Mr. Parker agreed to waive his rights to voluntarily terminate his employment without good reason in the two year period following the effective time of the merger and still receive full severance benefits under the terms of his employment agreement with respect to the change in control resulting from the merger, and we anticipate that each of the other senior executives who received awards under the incentive plan will agree, in consideration for these awards, to waive any rights to future change-of-control severance payments by New US Airways Group which might be triggered by this transaction.
Employment Agreement with W. Douglas Parker
      America West Holdings entered into an employment agreement with Mr. Parker, dated as of February 24, 2004. The principal terms of the agreement include the following:
      Positions. The employment agreement provides that Mr. Parker will serve as Chairman of the Board, President and Chief Executive Officer of America West Holdings and Chairman of the Board, President and Chief Executive Officer of America West Airlines, Inc.
      Term. The term of the agreement extends through December 31, 2007, and is automatically extended for successive one-year periods unless either party provides 15 months’ prior written notice that the term will not be extended.
      Compensation and Benefits. Mr. Parker will receive a minimum annual cash base salary in the amount of $550,000, or such higher amount as determined by the America West Holdings Compensation and Human Resources Committee. He is also eligible for an annual bonus based on a target of at least 80% of his base salary and a maximum of 160% of his base salary. Mr. Parker is also eligible to participate in the America West Holdings performance-based award plan and to receive equity-based incentive awards, including stock options and restricted stock awards. The employment agreement also provides for a $2 million term life insurance policy for beneficiaries designated by Mr. Parker.
      Termination Benefits. If Mr. Parker terminates his employment for good reason or for any reason within 24 months of a change in control (as defined below and which occurred on the effective date of the merger), or if America West Holdings terminates Mr. Parker’s employment for any reason other than misconduct, then Mr. Parker will receive the following termination benefits:
  •  A severance payment equal to 200% of the sum of Mr. Parker’s current base salary plus the greater of (i) the average of Mr. Parker’s bonus with respect to the three calendar years immediately prior to the termination and (ii) the target bonus for the year of termination.

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  •  Accelerated vesting of all stock and other awards held by Mr. Parker pursuant to America West Holdings’ incentive compensation plans, which awards will remain exercisable for a period of 36 months or such longer period as provided by the terms of any specific award.
 
  •  In respect of the performance-based award plan, a payment equal to 200% of the greater of (i) 125% of Mr. Parker’s current base salary and (ii) the amount that would have been paid to Mr. Parker if the total stockholder return for the performance cycle ending on December 31 of the year in which termination occurs had been measured as of the termination date.
 
  •  Continued benefits for Mr. Parker and his dependents under all medical plans and programs maintained by America West Holdings for a period of 24 months from the date of termination.
 
  •  Continued term life insurance for a period of 24 months from the date of termination.
 
  •  Lifetime space positive travel privileges for Mr. Parker and his wife and dependents.
 
  •  a tax gross-up payment to offset the taxes that could be imposed if any severance payments are considered to be “excess parachute payments” subject to excise tax under Section 4999 of the Internal Revenue Code.
      If Mr. Parker’s employment is terminated for any other reason, such as his death or disability, then Mr. Parker will receive varying combinations of termination benefits, including accelerated vesting of stock and other incentive compensation awards, continued health and life insurance benefits and travel privileges, depending on the specific circumstances of his termination.
      A “change in control” is defined in Mr. Parker’s employment agreement to include:
  •  Individuals currently constituting the America West Holdings board of directors, or whose election to the board of directors is approved by at least two-thirds of the incumbent directors, cease to constitute at least a majority of the America West Holdings board of directors.
 
  •  An individual, entity or group acquires 25% or more of the combined voting power of America West Holdings or America West Airlines, Inc. or more than 50% of America West Holdings’ Class A common stock.
 
  •  Any merger, consolidation or reorganization of America West Holdings or America West Airlines, Inc. is consummated, unless America West Holdings’ stockholders continue to hold at least 75% of the voting power of the surviving entity.
 
  •  The America West Holdings or America West Airlines, Inc. disposes of all or substantially all of its assets.
      Certain Tax Matters. The employment agreement also provides a tax gross-up payment to offset the cost of taxes that could be imposed if any severance payments due Mr. Parker are considered to be “excess parachute payments” subject to excise tax under Section 4999 of the Internal Revenue Code.
Executive Change in Control and Severance Benefits Agreements
      America West Holdings entered into executive change in control and severance benefits agreements with certain of its executive officers, including Messrs. Kirby, McClelland and Kerr. The severance benefits agreements provide for the following benefits to the covered executives in the event of a change in control, which is defined to have the same meaning as that in Mr. Parker’s employment agreement described above:
  •  Accelerated vesting of all outstanding stock options held by the executive.
 
  •  Lifetime positive travel space privileges for the executive and his or her dependents.

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      In addition, if the covered executive terminates his or her employment with America West Holdings within 24 months of a change in control for good reason or for any reason other than misconduct or disability, the covered executive is entitled to receive:
  •  A payment equal to 200% of the executive’s current base salary.
 
  •  A payment equal to 200% of the executive’s then current target bonus under the Company’s annual bonus program.
 
  •  In respect of the performance-based award plan, a payment equal to 200% of the greater of (i) the covered executive’s target award under the performance-based award plan and (ii) the amount that would have been paid to the covered executive if the total stockholder return for the performance cycle ending on December 31 of the year in which termination occurs had been measured as of the termination date.
 
  •  Continued benefits for the executive and his or her dependents under all medical plans and programs for a period of 24 months.
 
  •  Extended exercisability of all vested stock options until the earlier of (i) the expiration of the stock options in accordance with their terms or (ii) 18 months following the executive’s termination of employment.
Employment Agreement with Bruce R. Lakefield
      US Airways Group and US Airways, Inc. entered into an employment agreement with Mr. Lakefield April 19, 2004. This agreement was assumed as modified in connection with the debtors’ plan of reorganization. The principal terms of the agreement include the following:
      Term of Employment. The agreement provided for Mr. Lakefield to serve as US Airways Group’s and US Airways, Inc.’s Chief Executive Officer and President on an at-will basis. Upon a change of control, the agreement will become effective for a two-year term and terminate at the end of the two-year period, unless terminated earlier pursuant to the terms of the agreement.
      Salary and Benefits. Under the agreement, Mr. Lakefield is entitled to an annual base salary of not less than $425,000, subject to annual increases consistent with those provided to other key employees. Under the agreement, Mr. Lakefield received 471,200 shares of restricted stock and a nonqualified option to purchase 288,800 shares of Class A common stock at a price of $1.59 per share, each under the US Airways Group 2003 Stock Incentive Plan, which awards vest in 25% increments on each April 19, beginning in 2005. However, these options were cancelled as part of the debtors’ plan of reorganization. In addition to base salary, the agreement provides that Mr. Lakefield will be entitled to participate in the US Airways Group’s Incentive Compensation Plan, or ICP (or successor plan), and will be eligible to participate in US Airways Group’s Long-Term Incentive Plan, or LTIP, each as determined by the US Airways Group board of directors or the Human Resources Committee of the board of directors. Mr. Lakefield waived his participation in the ICP and the LTIP until US Airways, Inc. returns to profitability. Mr. Lakefield also waived participation in the defined contribution plans and in all tax-qualified retirement plans and nonqualified retirement or deferred compensation plans sponsored by US Airways Group or US Airways, Inc. Mr. Lakefield is entitled to participate in all welfare benefit and fringe benefit plans provided to other officers. At the time the agreement was executed, those benefits included on-line first class, positive space travel privileges for business and pleasure for Mr. Lakefield and his eligible family members, as well as a limited number of non-eligible family members and unrelated persons, a gross-up payment (up to a maximum of $10,000) to cover his tax liability resulting from such travel, free access to US Airways Club facilities for him and his eligible family members and certain temporary living expenses.
      Termination of Employment. Mr. Lakefield’s employment may be terminated at any time by mutual agreement, and terminates automatically upon his death. US Airways, Inc. or US Airways Group may also terminate the agreement upon ten days’ written notice upon Mr. Lakefield’s disability, or immediately at any time for “cause” as defined in the agreement. Mr. Lakefield may voluntarily terminate his employment, which

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may constitute termination for “good reason” upon certain events defined in the agreement. In the event of any termination by US Airways, Inc. or US Airways Group for cause or by Mr. Lakefield for good reason, the terminating party must give written notice that indicates the specific termination provision in the agreement that is relied upon and sets forth in reasonable detail the facts and circumstances that are the basis for the termination, as well as the termination date, which may not be more than 15 days after the notice date. It is anticipated that Mr. Lakefield will voluntarily terminate his employment for “good reason” upon completion of the merger with America West Holdings.
      Obligations Upon Termination. As a result of the merger with America West Holdings, Mr. Lakefield will step down as the Chief Executive Officer and President of US Airways, Inc. and US Airways Group, Inc. He will receive severance and change of control payments of $1.7 million. Mr. Lakefield waived payments under the LTIP that he otherwise would have been entitled to as a result of the change of control triggered by the merger with America West Holdings. In addition, upon termination of his employment other than for cause or termination by Mr. Lakefield for good reason, Mr. Lakefield is entitled to receive: (i) continuation of medical, dental, vision and prescription drug coverages for Mr. Lakefield and his dependents for 24 months on the same premium and coverage basis as active officers (or an equivalent payment); (ii) continuation of life insurance coverage for 24 months (or an equivalent payment); and (iii) on-line travel privileges to Mr. Lakefield and his eligible family members for life.
      Other Obligations. In the event that any of Mr. Lakefield’s compensation (whether required under the agreement or otherwise) would be subject to an excise tax under Internal Revenue Code Section 4999, US Airways, Inc. is required to pay Mr. Lakefield an additional gross-up payment, such that after payment of all taxes, including interest or penalties, on the gross-up payment, Mr. Lakefield will retain an amount of the gross-up payment equal to the excise tax (and any penalties and interest on the excise tax). Mr. Lakefield agreed to hold US Airways Group’s and US Airways Inc.’s secret or confidential information, knowledge or data as confidential, including after termination of employment, and agreed to nonsolicitation of customers and employees for one year after termination.
Employment Agreement with Alan W. Crellin
      US Airways Group entered into an employment agreement with Mr. Crellin in September 2005, which was approved by the bankruptcy court as a modified assumption of the Severance Agreement between US Airways, Inc. and Mr. Crellin dated June 26, 2002, as amended. The principal terms of the employment agreement include the following:
      Term of Employment. The agreement provides for Mr. Crellin to serve as US Airways Group’s Executive Vice President-Operations on an at-will basis. If a change of control, as defined in the agreement, of US Airways Group occurs, the agreement will become effective for a two-year term and will terminate at the end of the two-year period.
      Salary and Benefits. Under the agreement, Mr. Crellin is entitled to an annual base salary of $425,000, subject to annual increases based on performance. However, Mr. Crellin and US Airways Group have agreed to an annual reduced base salary of $317,475, subject to annual increases based on performance.
      If Mr. Crellin remains employed by US Airways Group at the time of the emergence from bankruptcy, Mr. Crellin is eligible to receive an award of restricted stock and/or a nonqualified stock option grant exercisable for shares of common stock under the 2005 equity incentive plan. The Compensation and Human Resources Committee of the board of directors will determine the amount of restricted stock to award and/or the number of shares subject to the nonqualified stock option, and the award of restricted stock and the nonqualified stock option grant will be effective on the date of emergence from bankruptcy. The stock option will have a per share exercise price equal to the fair market value of the common stock on the date of grant. The restricted stock will vest 50% on the date it is granted and an additional 25% of the restricted stock will vest on each of the next two anniversaries of the date of grant. Similarly, 50% of the shares subject to the option will become exercisable on the date of grant and an additional 25% of the shares subject to the option will become exercisable on each of the next two anniversaries of the date of grant.

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      Mr. Crellin will remain eligible to receive future grants and awards of restricted stock, options or other similar equity-based awards under the 2005 equity incentive plan. After a change of control, Mr. Crellin will receive equity-based grants and awards at levels comparable to other key employees receiving regular and normal course grants with comparable vesting and exercisability terms.
      In addition to his salary, the agreement provides Mr. Crellin will be eligible for an annual bonus in accordance with US Airways, Inc. Incentive Compensation Plan, or any successor plan, and will be eligible to participate in the US Airways, Inc. Long-Term Incentive Plan, or any successor plan, each as determined by the Compensation and Human Resources Committee of the board of directors.
      Under the agreement, Mr. Crellin is eligible to participate in the US Airways Group, Inc. Funded Executive Defined Contribution Plan and the US Airways Group, Inc. Unfunded Executive Defined Contribution Plan, collectively referred to as the defined contribution plans, and while participating in the defined contribution plans is not eligible for allocations of employer contributions under any other retirement plan or deferred compensation plan sponsored by US Airways Group. In October 2006, subject to certain conditions and limitations, Mr. Crellin may be eligible to have certain defined contribution plan payments, which were previously reduced, restored over a two-year period. While employed by US Airways Group, Mr. Crellin is eligible to participate in the welfare and fringe plans provided to other key employees.
      Termination of Employment. Mr. Crellin’s employment may be terminated at any time by mutual agreement, and terminates immediately upon his death. US Airways Group may terminate the agreement on ten days written notice upon Mr. Crellin’s disability, or immediately upon written notice for “cause,” as defined in the agreement, or without cause. Mr. Crellin may voluntarily terminate employment for any reason upon fifteen business days notice, or for “good reason,” upon certain events as defined in the agreement, provided that Mr. Crellin gives certain periods of advance notice and opportunities to cure as required by the agreement.
      Obligations upon Termination. If Mr. Crellin’s employment is terminated due to death or disability, for cause or due to voluntary resignation without good reason, Mr. Crellin is entitled to receive all reduced base salary and vacation accrued through the date of termination, within 30 days of the date of termination. If Mr. Crellin’s employment is terminated due to death or disability, US Airways Group must also pay a prorated annual bonus if annual bonuses are paid to executives for the year in which termination occurs. If Mr. Crellin is terminated due to disability, he will also be entitled to disability benefits on a level applicable for key employees. If US Airways Group terminates his employment without cause or Mr. Crellin terminates employment for good reason, he is entitled to receive: (i) all reduced base salary and vacation accrued through the date of termination; (ii) two times reduced base salary plus two times the target annual bonus if in effect for the year of termination (or if the bonus plan is not in effect and its suspension or termination was the reason for Mr. Crellin’s termination of employment, two times the annual bonus for the year prior to the suspension/termination of the bonus plan); provided, however, if Mr. Crellin terminates for good reason due to being required to relocate, he shall only receive 100% of reduced base salary and the annual bonus; (iii) a lump sum payment equal to the cost of COBRA continuation premiums for 18 months for Mr. Crellin and his covered dependents under the medical, dental, vision and prescription drug plans; (iv) continued life insurance coverage for 18 months on the same premium and coverage basis (or an equivalent payment); (v) on-line, first class, positive space travel privileges for Mr. Crellin and his eligible family members for life.
      If Mr. Crellin has been employed by US Airways Group for five years and his employment terminates for any reason, Mr. Crellin is entitled to: (i) travel privileges for life on the same basis as provided prior to termination, or if more favorable, any time after termination; (ii) continuation of health insurance benefits under the US Airways Group health insurance program until age 65, provided that Mr. Crellin continues to pay premiums at the same time and rate as active employees (and also provided that this coverage will be secondary if Mr. Crellin is eligible for health insurance through another employer); (iii) a lump sum cash payment equal to the present-value of post-age 65 lifetime medical benefits; and (iv) a lump sum cash payment that equals the difference between the value of the accrued but unused vacation paid to Mr. Crellin at the end of 2000 and the value of such a payment if it were calculated at his current rate of base salary on the date of termination.

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      Other Obligations. In the event that any of Mr. Crellin’s compensation, whether required under the agreement or otherwise, would be subject to an excise tax under Internal Revenue Code Section 4999, US Airways Group is required to pay to Mr. Crellin an additional gross-up payment, so that after payment of all taxes (including interest or penalties) on the gross-up payment, Mr. Crellin will retain an amount of the gross-up payment equal to the excise tax (and any penalties and interest on the excise tax). Mr. Crellin agrees to hold the secret or confidential information, knowledge or data of US Airways, Inc., and its affiliates, as confidential, including after termination of employment. The agreement also provides that Mr. Crellin may not solicit customers or employees of US Airways Group, or its affiliates, for one year after termination and that Mr. Crellin will not make any disparaging statements about US Airways Group or discuss his termination of employment with certain specified persons. To receive the payments provided for under the agreement following his termination of employment, the agreement provides that Mr. Crellin must sign a general release of claims, and it also provides that if Mr. Crellin breaches the restrictive covenants, he forfeits payments and benefits being provided to him. In the event of a breach, US Airways Group can also seek repayment of amounts previously paid.

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Summary Compensation Table
      The following tables set forth the total compensation paid for the fiscal years ended December 31, 2004, 2003 and 2002 to the individuals who serve as our Chairman and Chief Executive Officer and Vice Chairman, and each of our four other most highly compensated executive officers. These individuals are collectively referred to as the named executive officers. Compensation paid to Messrs. Parker, Kirby, McClelland and Kerr was paid by America West Holdings and compensation paid to Messrs. Lakefield and Crellin was paid by US Airways Group.
Summary Compensation Table
                                                                   
                    Long-Term Compensation    
                         
        Awards        
    Annual Compensation       Payouts    
        Restricted   Securities        
Name and Principal       Other Annual   Stock   Underlying   LTIP   All Other
Position   Year   Salary   Bonus   Compensation   Awards (6)   Options   Payouts (10)   Compensation
                                 
W. Douglas Parker
    2004     $ 550,000              (4)           250,000     $ 687,500     $ 5,338   (11)
  Chairman,     2003     $ 550,000     $ 1,000,000                   250,000           $ 5,226  
  President and     2002     $ 550,000                         600,000           $ 4,988  
  Chief Executive Officer of New US Airways Group                                                                
Bruce R. Lakefield
    2004     $ 307,558   (2)         $ 41,869  (5)   $ 687,952   (7)     288,800   (9)         $ 46,882   (12)
  Vice Chairman     2003     $ 73,250           $ 4,149  (5)   $ 10,000  (7)     5,000  (9)            
  of US Airways     2002                                            
  Group (1)                                                                
J. Scott Kirby
    2004     $ 380,000              (4)           100,000     $ 375,000     $ 10,389   (13)
  Executive Vice     2003     $ 358,333     $ 375,000                   100,000           $ 9,287  
  President —     2002     $ 317,917                         260,000           $ 9,043  
  Sales and Marketing of New US Airways Group                                                                
Jeffrey D. McClelland
    2004     $ 400,000              (4)           286,000     $ 400,000     $ 396,807   (14)
  Executive Vice     2003     $ 360,000     $ 375,000                   120,000           $ 891,545  
  President and     2002     $ 340,000                         53,338           $ 11,469  
  Chief Administrative Officer of New US Airways Group                                                                
Alan W. Crellin
    2004     $ 346,928           $ 219,940   (4)                     $ 354,550   (12)
  Executive Vice     2003     $ 352,750     $ 72,915   (3)   $ 227,368   (4)   $ 1,469,530   (8)     111,600   (9)         $ 376,256  
  President —     2002     $ 392,962     $ 102,081   (3)   $ 19,116  (4)        (8)     25,000   (9)         $ 267,266  
  Operations of US Airways Group                                                                
Derek J. Kerr
    2004     $ 261,667              (4)           135,000     $ 180,250     $ 259,583   (15)
  Senior Vice     2003     $ 252,500     $ 257,061                   30,000           $ 502,446  
  President and     2002     $ 205,452     $ 15,000                   10,000           $ 15,085  
  Chief Financial Officer of New US Airways Group                                                                
 
  (1)  Mr. Lakefield was appointed as President and Chief Executive Officer of US Airways Group and US Airways, Inc. on April 19, 2004.
 
  (2)  For 2004, includes $39,500 for director fees paid to Mr. Lakefield for service as a member of the board of directors through April 19, 2004, which consists of fees paid for board and committee meeting attendance. For 2003, includes $73,250 for director fees paid for service as a member of the board of directors, which amount includes an annual retainer, fees paid for board and committee meeting attendance, and service as Chairman of the Human Resources and Strategy and Finance Committees of the board of directors of US Airways Group.

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  (3)  Amounts reflected for Mr. Crellin were earned in 2001 and paid in 12 monthly installments beginning in June 2002.
 
  (4)  For 2004, Messrs. Parker, Kirby, McClelland and Kerr did not receive perquisites or other personal benefits in an aggregate amount in excess of the lesser of $50,000 or 10% of his annual salary. In 2004, each of these named executive officers received an automobile allowance per America West Holdings’ policy for executive perquisites. America West Holdings also provided positive space pleasure travel benefits and reimbursement for estimated taxes in connection with such travel each year to these named executive officers. Amount disclosed for Mr. Crellin for 2004 includes $9,000 paid for automobile expenses, $7,668 in income and tax liability payments related to personal travel provided by US Airways, Inc., $4,386 for tax liability payments related to premiums paid by US Airways, Inc. on a life insurance policy (as described in footnote 9) and $198,886 for tax liability payments related to company contributions under the US Airways Funded Executive Defined Contribution Plan (as described in footnote 9). Amount disclosed for Mr. Crellin for 2003 includes $9,000 paid for automobile expenses, $1,081 in income and tax liability payments related to personal travel provided by US Airways, Inc., $2,730 for tax liability payments related to premiums paid by US Airways, Inc. on a life insurance policy and $214,557 for tax liability payments related to company contributions under the US Airways Funded Executive Defined Contribution Plan. Amount disclosed for Mr. Crellin for 2002 includes $10,229 in income and tax liabilities incurred in connection with certain compensation related expenses, $8,250 paid for automobile expenses and $637 for income and tax liability payment related to personal travel provided by US Airways, Inc.
 
  (5)  Amount disclosed for 2004 includes $29,371 for tax liability related to temporary living expenses, $9,835 in income and tax liability payments related to personal travel provided by US Airways, Inc., $2,663 for tax liability payments related to premiums paid by US Airways, Inc. on a life insurance policy (as described in footnote 9) and, for 2003, $4,149 in income and tax liability payments related to personal travel provided by US Airways, Inc.
 
  (6)  The aggregate number and value as of December 31, 2004, of the named executive officers’ restricted share holdings are as follows: Mr. Parker, 0 shares, $0; Mr. McClelland, 0 shares, $0; Mr. Kirby, 0 shares, $0; and Mr. Kerr 0 shares, $0. Dividends will be paid on restricted stock if and when declared on America West Holdings’ Class B common stock. The figures in this column for Mr. Lakefield and Mr. Crellin for 2004 and 2003 reflect the value of restricted shares of US Airways Group’s Class A common stock on the date of grant using the per share value of the stock on the date of grant. Additionally, in connection with US Airways Group’s and its subsidiaries’ prior bankruptcy, under the 2003 plan of reorganization all outstanding shares of common stock of US Airways Group’s predecessor corporation were cancelled on March 31, 2003, the effective date of the 2003 plan of reorganization. Consequently, all shares of predecessor corporation restricted stock granted in 2002 were cancelled, as further described below. The aggregate number of shares of restricted stock held by each of Mr. Lakefield and Mr. Crellin on December 31, 2004, and the respective fair market value of the stock on such date were, respectively: Mr. Lakefield — 471,200 shares, $537,168; and Mr. Crellin — 188,400 shares, $214,776. The restricted stock was entitled to the same dividends, if any, payable on outstanding shares of US Airways Group Class A common stock. The shares of restricted stock held by Mr. Lakefield and Mr. Crellin were cancelled pursuant to the plan of reorganization.
 
  (7)  Amount disclosed for 2004 reflects an award of 471,200 shares of restricted stock to Mr. Lakefield effective May 19, 2004 based on a per share value of $1.46 on the grant date, vesting 25% on each of April 19, 2005, 2006, 2007 and 2008. Amount disclosed for 2003 reflects an award of 1,362.4 deferred stock units granted to Mr. Lakefield effective July 31, 2003, under the 2003 Nonemployee Director Deferred Stock Unit Plan, based on a per share value of $7.34 on the grant date. The deferred stock units are payable solely in cash upon termination of service as a member of the board of directors. The deferred stock units are entitled to dividend equivalents if any dividends are paid on the US Airways Group Class A common stock. The shares of restricted stock and deferred stock units were cancelled pursuant to the plan of reorganization.
 
  (8)  The amount disclosed for 2003 reflects an award of (a) 102,584 shares of restricted stock effective July 31, 2003, vesting 50% on June 30, 2005 and 50% on January 1, 2006, based on a per share value of $7.34 on the grant date, and (b) 85,816 shares of restricted stock effective October 16, 2003, vesting 100% on January 1, 2006, based on a per share value of $8.35 on the grant date. Because US Airways Group’s Class A common stock was not listed on the grant dates, the $7.34 per share value is based on the per share value determined pursuant to the 2003 plan of reorganization and also subsequently paid in a private placement of US Airways Group’s Class A common stock in August 2003, and the $8.35 per share value is based on the weighted average trading price on the over-the-counter bulletin board for the five preceding days, due to the low trading volume on October 16, 2003. Mr. Crellin had shares of restricted stock of US Airways Group’s predecessor corporation which were canceled on March 31, 2003, the effective date of the 2003 plan of reorganization, and Mr. Crellin received no payment with respect to such cancellation. These cancelled shares were received pursuant to (a) an award effective January 16, 2002 of 10,000 shares of restricted common stock of US Airways Group’s predecessor corporation, vesting 25% on each of January 16, 2003 and the three succeeding anniversaries thereafter, with a value of $56,100 based on the closing price ($5.61) on the grant date; and (b) an award effective October 16, 2001 of 15,000 shares of restricted common stock of US Airways Group’s predecessor corporation, vesting 25% on November 15, 2001, 25% on December 1, 2002 and 25% on each of October 16, 2003 and October 16, 2004, with a value of $80,400 based on the closing price ($5.36) on the grant date.
(9)  Amounts shown for 2004 reflect options granted in 2004, as described under “Stock Option Grants and Exercises” below. Amounts shown for 2003 for Mr. Crellin reflect Class A-1 warrants granted in 2003 with an exercise price of $7.42 per share. Amounts shown for 2003 for Mr. Lakefield include options exercisable for 5,000 shares of US Airways Group Class A common stock granted pursuant to the 2003 Nonemployee Director Stock Incentive Plan. Amounts shown for 2002 reflect options exercisable for shares of common stock of US Airways Group’s predecessor corporation, all of which were cancelled on March 31, 2003, the effective date of the 2003 plan of reorganization. Mr. Crellin did not receive any payment in connection with the cancellation of the options.

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(10)  Payouts for 2004 resulted from long-term award opportunities granted in January 2003 under the Performance-Based Award Plan. These payouts were based on the achievement of a TSR ranking above the threshold ranking relative to the pre-defined competitive peer group for the first transition cycle that began on January 1, 2003 and ended March 31, 2004, and the absence of any default under America West Holdings’ ATSB guaranteed loan at the end of that cycle.
 
(11)  Reflects premiums paid and gross-up on premiums paid by America West Holdings for term life insurance for Mr. Parker of $5,338.
 
(12)  As further described herein, amounts disclosed include the value of life insurance benefits for the Messrs. Lakefield and Crellin and contributions to various defined contribution pension plans. Under the US Airways, Inc. life insurance plan, individual life insurance coverage is available to executive officers, with US Airways, Inc. paying the premium associated with this coverage. The following amounts reflect the dollar value of premiums paid by US Airways, Inc. on life insurance policies in 2004 for Messrs. Lakefield and Crellin: Mr. Lakefield — $3,805; and Mr. Crellin — $6,321. Amounts disclosed for 2004 include US Airways, Inc. contributions to the US Airways Funded Executive Defined Contribution Plan and accruals under the US Airways Unfunded Executive Defined Contribution Plan, which were adopted during 2003 to replace supplemental retirement arrangements in effect before US Airways Group and US Airways Inc.’s prior bankruptcy reorganization, and which provide supplemental retirement benefits to executives. The US Airways Funded Executive Defined Contribution Plan also provides for full funding of the benefits in a secular trust. The following amounts reflect the value of the benefits accrued under the US Airways Unfunded Executive Defined Contribution Plan during 2004 to Messrs. Lakefield and Crellin: Mr. Lakefield — $0; and Mr. Crellin — $73,580. The following amounts reflect the value of the benefits contributed to the US Airways Funded Executive Defined Contribution Plan during 2004 to Messrs. Lakefield and Crellin: Mr. Lakefield — $0; and Mr. Crellin — $274,649. The amount reflected for 2004 also includes $43,077 in temporary living expenses for Mr. Lakefield.
 
(13)  Reflects premiums paid and gross-up on premiums paid by America West Holdings for term life insurance for Mr. Kirby of $3,399, matching contributions made by America West Holdings for flexible spending account dependent care reimbursement of $840 and matching contributions made by America West Holdings under its 401(k) plan of $6,150.
 
(14)  Includes special payments of $385,000 in recognition of contributions made in connection with the 2001-2002 financial restructuring of America West Holdings during a period when America West Holdings was unable to pay Mr. McClelland at market compensation levels, premiums paid and gross-up on premiums paid by America West Holdings for term life insurance for Mr. McClelland of $5,657 and matching contributions made by America West Holdings under its 401(k) plan of $6,150.
 
(15)  Includes special payments of $250,000 in recognition of contributions made in connection with the 2001-2002 financial restructuring of America West Holdings during a period when America West Holdings was unable to pay Mr. Kerr at market compensation levels, premiums paid and gross-up on premiums paid by America West Holdings for term life insurance for Mr. Kerr of $3,433 and matching contributions made by America West Holdings under its 401(k) plan of $6,150.

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Stock Option Grants and Exercises
      America West Holdings granted stock options and restricted stock awards to its executive officers under its 2002 Incentive Equity Plan. In 2004, America West Holdings granted options to purchase an aggregate of 1,973,100 shares to all participants under the 2002 Incentive Equity Plan. US Airways Group granted stock options and restricted stock awards to its executive officers under its 2003 Stock Incentive Plan, as amended and restated. In 2004, US Airways Group granted options to purchase 472,340 shares to all participants under this plan. In connection with the merger, each outstanding America West Holdings stock option was converted into an option to purchase the number of shares of New US Airways Group common stock that is equal to the product of the number of shares of America West Holdings Class B common stock that could have been purchased before the merger upon the exercise of the option multiplied by 0.4125 and rounded to the nearest whole share, at an exercise price per share equal to the exercise price per share of the option immediately prior to the merger divided by 0.4125. The following tables show, for the fiscal year ended December 31, 2004, certain information regarding options granted to, exercised by and held at year end by, the named executive officers:
2004 Option Grants
                                                 
    Individual Grants           Potential Realizable Value
                at Assumed Annual Rates
    Number of               of Stock Price
    Securities               Appreciation for Option
    Underlying   % of Total           Term (1)
    Options   Options   Exercise Price   Expiration    
Name   Granted   Granted   Per Share   Date   5%   10%
                         
W. Douglas Parker
    250,000       12.7 %   $   10.56       2/25/14     $   1,663,200     $   4,197,600  
Bruce R. Lakefield
    288,800  (2)     61.1 %   $ 1.59       6/19/14     $ 288,783     $ 731,834  
J. Scott Kirby
    100,000       5.1 %   $   10.56       2/25/14     $   665,280     $   1,679,040  
Jeffrey D. McClelland
    186,000       9.4 %   $   10.56       2/25/14     $   1,237,421     $   3,123,014  
      100,000       5.1 %   $   8.39       3/23/14     $   528,570     $   1,334,010  
Alan W. Crellin
                                   
Derek J. Kerr
    85,000       4.3 %   $   10.56       2/25/14     $   565,488     $   1,427,184  
      50,000       2.5 %   $   8.39       3/23/14     $   264,285     $   667,005  
 
(1)  The potential realizable value is based on the term of the option at the time of grant. It is calculated by assuming that the stock price on the date of grant appreciates at the indicated annual rate, compounded annually for the entire term of the option and that the option is exercised and sold on the last day of its term for the appreciated stock price. These amounts represent certain assumed rates of appreciation only, in accordance with the rules of the SEC, and do not reflect New US Airways Group’s estimate or projection of future stock price performance. Actual gains, if any, are dependent upon the actual future performance of the New US Airways Group common stock and no gain to the optionee is possible unless the stock price increases over the option term, which will benefit all stockholders.
 
(2)  These options were cancelled pursuant to the plan of reorganization.
2004 Option Exercises and Year End Option Values
                                                 
            Number of Securities   Value of Unexercised
    Shares       Underlying Unexercised   In-the-Money
    Acquired       Options at Year End 2004   Options at Year End (1)
    on   Value        
Name   Exercise   Realized   Exercisable   Unexercisable   Exercisable   Unexercisable
                         
W. Douglas Parker
                1,063,335       616,665     $   856,171     $   919,329  
Bruce R. Lakefield
                      288,800  (2)   $     $  
J. Scott Kirby
                369,668       253,332     $   379,537     $   386,263  
Jeffrey D. McClelland
                330,726       251,112     $   164,355     $   180,424  
Alan W. Crellin
                111,600  (2)         $     $  
Derek J. Kerr
                161,167       93,333     $   18,534     $   9,266  
 
(1)  Based on the value obtained by subtracting the option exercise prices from the closing sales price of America West Holdings Class B common stock on the NYSE on December 31, 2004 ($6.58 per share).
 
(2)  These securities were cancelled pursuant to the plan of reorganization.

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     The following table shows, for the fiscal year ended December 31, 2004, certain information with respect to incentive award opportunities granted to the named executive officers who were previously officers of America West Holdings and America West Airlines, Inc. under the America West Holdings performance-based award plan:
America West Holdings Long-Term Incentive Plans — Awards in Last Fiscal Year
                                                 
            Estimated Future Payouts Under Non-Stock
    Number of   Performance or   Price-Based Plans (1)(2)
    Shares, Units   Other Period    
    or Other   Until Maturation   Below    
Name   Rights   or Payout   Threshold   Threshold   Target   Maximum
                         
W. Douglas Parker
    N/A       1/1/04–12/31/06     $   0     $   297,000     $   687,500     $   1,100,000  
J. Scott Kirby
    N/A       1/1/04–12/31/06     $   0     $   167,700     $   390,000     $   682,500  
Jeffrey D. McClelland
    N/A       1/1/04–12/31/06     $   0     $   172,000     $   400,000     $   700,000  
Derek J. Kerr
    N/A       1/1/04–12/31/06     $   0     $   81,000     $   189,000     $   378,000  
 
(1)  Payouts, if any, will be based on the achievement of a total stockholder return ranking above the threshold ranking relative to a pre-defined competitive peer group for the performance cycle beginning January 1, 2004 and ending December 31, 2006. Payouts may range from zero up to 200% of the target award and are based on a percentage of the named executive officer’s base salary in effect on the date of the payout.
 
(2)  In addition to the performance cycle under the performance-based award plan shown in the table above, two other performance cycles also are pending, the first beginning January 1, 2003 and ending December 31, 2005 and the second beginning January 1, 2005 and ending December 31, 2007.
Retirement Benefits
      US Airways, Inc. Qualified Retirement Plan. US Airways, Inc. previously maintained a defined benefit retirement plan for its salaried and certain hourly employees which provided noncontributory benefits based upon years of service and the employee’s highest three-year average annual compensation during the last ten calendar years of service. The retirement plan was frozen in 1991, but benefits accrued as of the date the plan was frozen remain outstanding until they are paid to participants. Under the retirement plan, benefits were generally payable commencing at age 65. However, the retirement plan provided reduced early retirement benefits commencing as early as age 55. Benefits under the retirement plan were integrated with the Social Security program. Compensation under the retirement plan included the employee’s total compensation as reported on Form W-2, plus exclusions from income due to employee elections under Sections 401(k), 125 and 132(f)(4) of the Internal Revenue Code of 1986, as amended, minus any imputed income due to the exercise of stock options, income resulting from group term insurance, income imputed due to air pass privileges, expense reimbursements and deferred compensation received in the form of a lump sum distribution. This definition of compensation excludes the following items reported as compensation under the US Airways Group Summary Compensation Table: (i) imputed income from stock options, (ii) income resulting from group term insurance, (iii) income imputed due to air pass privileges, and (iv) certain expense reimbursements. On November 12, 2004, US Airways, Inc. filed a motion requesting a determination from the bankruptcy court that US Airways, Inc. satisfied the financial requirements for a “distress termination” of the retirement plan, which the bankruptcy court approved on January 6, 2005. The retirement plan was terminated effective January 17, 2005, by agreement between the PBGC and US Airways, Inc. Effective February 1, 2005, the PBGC was appointed trustee for the plan. Mr. Crellin participated in the retirement plan. None of the other named executive officers participated in the retirement plan. Mr. Crellin has two years of credited service under the retirement plan. Assuming retirement effective January 1, 2005 and payment in the form of a single life annuity under the retirement plan, Mr. Crellin would receive payments of $1,896.85 per month through January 31, 2009, reduced to $1,799.48 per month from February 1, 2009 through November 30, 2013, and further reduced to $1,755.22 per month on and after December 1, 2013. If the payment were made in the form of a joint and 50% survivor annuity with Mr. Crellin’s spouse as beneficiary under the retirement plan, Mr. Crellin would receive payments of $1,701.47 per month through January 31, 2009, reduced to $1,614.13 per month from February 1, 2009 through November 30, 2013, and further reduced to $1,574.43 per month on and after December 1, 2013, and

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upon Mr. Crellin’s death his surviving spouse would receive 50% of the monthly payment amounts for her life. As a result of the termination of the retirement plan, Mr. Crellin’s benefits may be reduced.
      US Airways, Inc. Executive Defined Contribution Plans. Mr. Crellin receives a defined contribution benefit under the US Airways, Inc. Funded Executive Defined Contribution Plan and the US Airways, Inc. Unfunded Executive Defined Contribution Plan, which are referred to as the defined contribution plans. These plans have been assumed in connection with the debtors’ plan of reorganization. Under the defined contribution plans, a contribution is credited to each participant each year, the amount of which is individually determined based upon age, service and projected earnings (including target annual bonus) such that the annual contribution to the defined contribution plans and an assumed 8% investment return will achieve a target annual benefit of 50% of final average earnings (based on total cash compensation) at normal retirement age (age 62) when combined with the executive’s benefits under the tax-qualified retirement plans maintained by US Airways, Inc. The annual contribution to the Funded Executive Defined Contribution Plan may not exceed 64% of the executive’s earnings for the year, and the annual allocation to the Unfunded Executive Defined Contribution Plan may not exceed 16% of the executive’s earnings for the year. Under the defined contribution plans, contributions for disabled executives will continue during the period of disability benefits, and contributions continue for the first twelve months following an executive starting an absence from work due to the birth, adoption or caring for a child after birth or adoption. Furthermore, upon termination of an executive on or after the occurrence of a change in control (as defined in the defined contribution plans), US Airways, Inc. will make an additional contribution or allocation to the defined contribution plans for the year in which the termination of employment occurs, in the amount equal to the allocations that US Airways, Inc. would have had to make during the years for which US Airways, Inc. would be required to continue to provide such benefits under the executive’s employment agreement or severance agreement. Participants in the defined contribution plans do not receive employer contributions under the tax-qualified retirement plans sponsored by US Airways, Inc. (including the 401(k) and money purchase pension plans) or under any other nonqualified defined contribution plans associated with the tax-qualified retirement plans.
      Mr. Crellin receives a benefit based upon three years of credited service for each of the first five years of service (beginning on date of hire), and thereafter two years of credited service for each actual year of service up to a maximum of 30 years of credited service. Contributions and allocations are fully vested. Eighty percent (80%) of the target benefit amount is calculated under the Funded Executive Defined Contribution Plan and reduced to present value based on actuarial assumption under that plan, which amount, less the maximum amount of 401(k) contributions permitted for the year, is contributed to a secular trust on a monthly basis, subject to certain limitations on the total amount that can be contributed on an annual basis. Participants also receive a payment to cover any income tax liabilities incurred in connection with the contributions to the secular trust. The remainder of the target benefit amount is unfunded and is credited to an account with an assumed annual 8% rate of return. Under a letter agreement entered into with Mr. Crellin on October 20, 2004, contributions under the defined contribution plans after October 11, 2004 are subject to a 25% reduction. Distributions from the Funded Executive Defined Contribution Plan will be made to participants upon termination of employment in a single lump sum payment in cash. Distributions from the Unfunded Executive Defined Contribution Plan will be made to participants in a single lump sum payment in cash after the later of termination of employment or attainment of age 62.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
      Richard A. Bartlett, who has been nominated by Eastshore Aviation, LLC as a member of our board of directors, is a greater than 10% shareholder of Air Wisconsin Airlines Corporation, the majority owner of Eastshore Aviation. Mr. Bartlett is also a minority owner of Eastshore Aviation. In February 2005, Eastshore Aviation entered into an agreement with US Airways Group to provide $125 million financing commitment to provide equity funding for a plan of reorganization, in the form of a debtor in possession term loan. Under the terms of US Airways Group’s plan of reorganization, Eastshore Aviation received a cash payment in the amount of all accrued interest on the loan, and the principal amount of $125 million was converted into 8,333,333 shares of New US Airways Group common stock at a conversion price of $15.00 per share. In addition, Eastshore Aviation had an option, under certain circumstances, to purchase up to an additional 1,666,667 shares of New US Airways Group common stock, which Eastshore Aviation transferred to Par Investment Partners, L.P. As described in the section entitled “The New Equity Investments,” New US Airways Group will also make an offer to Eastshore Aviation, upon the expiration of the equity investor options, to repurchase shares of common stock held by Eastshore Aviation in an amount equal to one-third of the proceeds received from the exercise of the equity investor options at a purchase price of $15.00 per share. Eastshore Aviation will have the right, but not the obligation, to accept the offer in whole or in part for a period of at least 30 days after receipt of the offer.
      US Airways, Inc. and Air Wisconsin also entered into a regional jet services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under a US Airways Express code share arrangement. On April 8, 2005, Air Wisconsin notified US Airways Group of its intention to deploy 70 regional jets, the maximum number provided for in the agreement, into the US Airways Express network. The amount expected to be paid to Air Wisconsin in 2005 will be approximately $80 million.
      Robert A. Milton, who has been nominated by ACE Aviation Holdings Inc. as a member of our board of directors, is the Chairman, President and Chief Executive Officer of ACE Aviation Holdings. As described in more detail in the section entitled “The New Equity Investments,” ACE Aviation Holdings purchased 5,000,000 shares of New US Airways Group common stock at a purchase price of $15.00 per share, for a total investment of $75 million. ACE Aviation Holdings also has an option, under certain circumstances, to purchase up to an additional 1,000,000 shares of New US Airways Group common stock at a purchase price of $15.00 per share. In addition, as described in more detail in the section entitled “The New Equity Investments — Commercial Agreements with ACE Aviation Holdings Inc.,” ACE Aviation Holdings or its subsidiaries entered into four separate memoranda of understanding with US Airways Group and America West Holdings relating to definitive commercial agreements to be entered into on market terms.
      Edward L. Shapiro, who has been nominated by Par Investment Partners, L.P., as a member of our board of directors, is a Vice President and partner of PAR Capital Management, the general partner of the general partner of Par Investment Partners, L.P. As described in more detail in the section entitled “The New Equity Investments,” Par Investment Partners purchased 6,768,485 shares of New US Airways Group common stock at a purchase price of $15.00 per share, for a total investment of $100 million. Par Investment Partners also has an option, under certain circumstances, to purchase up to an additional 1,333,333 shares of New US Airways Group common stock at a purchase price of $15.00 per share. As noted above, Par Investment Partners purchased the option of Eastshore Aviation, and therefore holds another option to purchase up to an additional 1,666,667 shares of New US Airways Group common stock at a purchase price of $15.00 per share.
      Richard P. Shifter, a member of our board of directors, is a partner of Texas Pacific Group, which was a controlling stockholder of America West Holdings prior to the completion of the merger. An affiliate of Texas Pacific Group received $6.4 million as an advisory fee for providing financial advisory services rendered in connection with the merger and in contribution for and reimbursement for certain expenses incurred by Texas Pacific Group and its affiliates in connection with the merger. In addition, Texas Pacific Group had agreed to reimburse America West Holdings approximately $2.5 million for expenses incurred by America West Holdings in the second half of 2004 on its behalf. The full amount was reimbursed to America West Holdings in 2005.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
      New US Airways Group will account for the merger as a “reverse acquisition” using the purchase method of accounting in conformity with accounting principles generally accepted in the United States of America. Although the merger was structured such that America West Holdings became our wholly owned subsidiary at closing, America West Holdings will be treated as the acquiring company for accounting purposes under SFAS No. 141, “Business Combinations” due to the following factors: (1) America West Holdings’ stockholders are expected to own approximately 33% of New US Airways Group common stock outstanding immediately following the merger and this offering as compared to certain unsecured creditors of the debtors who will hold approximately 10% (these percentages reflect certain assumptions concerning the likely exchange of certain convertible debt and the impact of certain securities that are dilutive at the per share purchase price paid by the equity investors); (2) America West Holdings received a larger number of designees to our board of directors; and (3) America West Holdings’ current Chairman and Chief Executive Officer serves as our Chairman and Chief Executive Officer following the merger. The following unaudited pro forma condensed combined balance sheet as of June 30, 2005 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2004 and six months ended June 30, 2005 are based on the historical consolidated financial statements of US Airways Group and on the historical consolidated financial statements of America West Holdings, included in US Airways Group’s and America West Holdings’ respective Annual Reports on Form 10-K for the year ended December 31, 2004 and their Quarterly Reports on Form 10-Q for the quarterly period ended June 30, 2005, all of which are attached as annexes to this prospectus, giving effect to the merger and other transactions that were effective upon completion of the merger.
      The unaudited pro forma condensed combined statements of operations give effect to the merger as if it had occurred on January 1, 2004 and the unaudited pro forma condensed combined balance sheet gives effect to the merger as if it had occurred on June 30, 2005. The two major categories of adjustments reflected in the pro forma condensed combined financial statements are “Purchase Accounting Adjustments” and “Other Adjustments.”
Purchase Accounting Adjustments
      Purchase accounting adjustments include adjustments necessary to (1) allocate the purchase price to the tangible and intangible assets and liabilities of US Airways Group based on their fair values; (2) reflect the expected disposition of prepetition liabilities upon US Airways Group’s emergence from bankruptcy; (3) reflect the changes in deferred taxes; and (4) conform the accounting policies of US Airways Group and America West Holdings. A detailed description of each of these purchase accounting adjustments follows:
      Fair Market Value Adjustments — The pro forma financial statements reflect the purchase price allocation based on a preliminary assessment of fair market values and lives assigned to the assets, liabilities and leases being acquired. Fair market values in the pro forma financial statements were determined based on preliminary consultation with independent valuation consultants, industry trends and by reference to market rates and transactions. After the closing of the merger, we, with the assistance of valuation consultants, will complete our evaluation of the fair value and the lives of the assets, liabilities and leases acquired. Fair market value adjustments reflected in the pro forma financial statements may be subject to significant revisions and adjustments pending finalization of those valuation studies. Significant assets and liabilities adjusted to fair market value which are subject to finalization of valuation studies include expendable spare parts and supplies, property and equipment, airport take-off and landing slots (included in other intangibles in the pro forma balance sheet), aircraft leases, deferred revenue and continuing debt obligations of New US Airways Group.
      US Airways Group’s Bankruptcy — In connection with US Airways Group’s emergence from bankruptcy, the plan of reorganization provides for the disposition of prepetition liabilities classified as “Liabilities Subject to Compromise” on US Airways Group’s historical balance sheet. A portion of these liabilities classified as subject to compromise were restructured and continue to be our liabilities after the

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merger and a portion were discharged with creditors only entitled to receive such distributions of cash and our common stock as provided under the plan of reorganization. The pro forma accounting adjustments reflect a preliminary determination of liabilities expected to continue, which have been reclassified on the pro forma balance sheet, and those expected to be discharged which have been eliminated from the pro forma balance sheet. The ultimate resolution of certain of the claims asserted against US Airways Group in the Chapter 11 cases will be subject to negotiations and bankruptcy court procedures that will occur after the date of this prospectus. Therefore the final determination of liabilities continuing or being discharged upon emergence from bankruptcy may result in significant further revisions and adjustments. Persons holding equity in US Airways Group prior to emergence are not entitled to any distribution and their stock has been cancelled. Reorganization costs associated with the bankruptcy included in the US Airways Group historical financial statements have also been eliminated from the pro forma financial statements.
      Purchase Price Allocation — The value of the merger consideration was determined based on America West Holdings’ traded market price per share due to US Airways Group operating under bankruptcy protection. The outstanding shares of America West Holdings at June 30, 2005 were valued at $4.82 per share, resulting in a value assigned to the shares of $175 million. The $4.82 per share value is based on the five-day average share price of America West Holdings with May 19, 2005, the merger announcement date, as the midpoint. The outstanding shares of America West Holdings Class A and Class B common stock were converted to our common stock at a conversion rate of 0.5362 and 0.4125, respectively. Certain unsecured creditors of US Airways Group will be issued approximately 8.2 million shares of our common stock in settlement of their claims. The fair value of that common stock valued at an equivalent price based on the $4.82 value of the America West Holdings stock is $96 million. America West Holdings expects to incur direct acquisition costs in connection with the merger of approximately $19 million. The following table summarizes the estimated purchase price (dollars in millions):
           
Fair value of common shares issued to US Airways Group’s unsecured creditors
  $ 96  
Estimated merger costs
    19  
       
 
Total purchase price
  $ 115  
       
      The following table summarizes the pro forma net assets acquired and liabilities assumed in connection with the merger and the preliminary allocation of the purchase price (dollars in millions):
           
Current assets
  $ 1,424  
Property plant and equipment, net
    2,765  
Other assets
    1,366  
Goodwill
    535  
Liabilities assumed
    (5,975 )
       
 
Total purchase price
  $ 115  
       
      Income Taxes — The pro forma balance sheet reflects a pro forma adjustment to record a deferred tax liability for US Airways Group, primarily due to the significant discharge of prepetition liabilities in connection with the emergence of US Airways Group from bankruptcy. Upon completion of the merger, America West Holdings will evaluate whether there is any reduction necessary of its deferred tax asset valuation allowance. Any such reduction in the valuation allowance would be recorded as a decrease to goodwill. Due to the change in ownership upon completion of the merger, the annual usage of any attributes that were generated prior to the merger may be substantially limited.
      Conforming Accounting Policies — The pro forma financial statements reflect the following adjustments to conform the accounting policies of US Airways Group with those of America West Holdings.
  Share-based compensation — US Airways Group is conforming its policy of accounting for share-based compensation under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” or SFAS 123, to America West Holdings’ policy of accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” or APB No. 25.

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  Passenger Transportation Revenues — US Airways Group is conforming its passenger revenue recognition policy to America West Holdings’ policy, which estimates and records at the time of sale a portion of passenger ticket revenue for those tickets expected to expire unused and defers costs such as credit card fees and computer reservation system fees until the related revenue is recognized.
      Change in Accounting Policy — The pro forma balance sheet reflects the following adjustment to conform the accounting policies of America West Holdings with that of US Airways Group, the effect of which will be treated as a cumulative effect of a change in accounting principle upon the completion of the merger.
  Aircraft Maintenance and Repairs — US Airways Group charges maintenance and repair costs for owned and leased flight equipment to operating expense as incurred. America West Holdings records the cost of major scheduled airframe, engine and certain component overhauls as capitalized assets that are subsequently amortized over the periods benefited (deferral method). Upon the completion of the merger, America West Holdings will change its accounting policy from the deferral method to the expense as incurred method. While the deferral method is permitted under accounting principles generally accepted in the United States of America, America West Holdings believes that the expense as incurred method is preferable and the predominant method used in the airline industry.
      The historical financial statements of US Airways Group reflect other reclassifications of certain balances to conform with America West Holdings’ financial statement presentation. Additionally, the 2004 historical statement of operations for America West Holdings does not reflect reclassifications made by America West Holdings in its first and second quarter 2005 financial statements as filed in its Form 10-Q.
Other Adjustments
      Critical to US Airways Group’s emergence from bankruptcy and its merger with America West Holdings is additional financing and liquidity to fund operations. Several material agreements have been entered into that became effective either before, at or immediately following completion of the merger. The unaudited pro forma condensed combined statements of operations give effect to these material agreements as if they occurred on January 1, 2004 and the unaudited pro forma condensed combined balance sheet gives effect to the material agreements as if they occurred on June 30, 2005.
      The New Equity Investments — The new equity investors, ACE Aviation Holdings Inc., Par Investment Partners L.P., Peninsula Investment Partners L.P., Tudor Proprietary Trading, L.L.C. and a group of investors for which Tudor Investment Corp. acts as investment adviser, and certain investors advised by Wellington Management Co. LLP, invested $440 million in consideration for the issuance of 28,132,112 shares of New US Airways Group common stock. Eastshore Aviation, LLC converted the outstanding principal amount of its junior debtor in possession financing, or the DIP facility, into approximately 8,333,333 shares of New US Airways Group common stock. As of June 30, 2005, US Airways Group had drawn $100 million under the DIP facility. The final $25 million was drawn on August 17, 2005. The pro forma adjustments reflect the $565 million of new equity. See also the section entitled “The New Equity Investments.”
      GE Merger MOU — US Airways Group and America West Holdings reached a comprehensive agreement with General Electric Capital Corporation, or GECC, and its affiliates as described in the Master Merger Memorandum of Understanding, which we refer to as the GE Merger MOU. The key aspects of the GE Merger MOU are as follows (See the section entitled “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources”):
  The GE Merger MOU provides for continued use by US Airways Group of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates, and the return to GECC of certain other leased Airbus and Boeing aircraft. The pro forma adjustments reflect the modification of monthly lease rates.

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  •   GECC provided a bridge facility of approximately $56 million for use by the US Airways Group during the pendency of the Chapter 11 proceedings. US Airways, Inc. will pay an affiliate of GE $125 million in cash by September 30, 2005 in exchange for retirement of the bridge facility, forgiveness and release of US Airways, Inc. from certain prepetition obligations, deferral of certain payment obligations, and amendments to future maintenance agreements. The payment is expected to be funded through the issuance of $125 million of convertible notes in a separate private offering to qualified institutional buyers. The pro forma statements of operations reflect interest expense related to the expected issuance of convertible notes. There can be no assurance that the convertible notes will be issued and, if issued, that they will result in $125 million in proceeds. The pro forma adjustments reflect the forgiveness of certain prepetition obligations.
 
  •   In June 2005, GECC purchased and immediately leased back to US Airways Group: (a) the assets securing the 2001 GE credit facility and the 2003 GE liquidity facility, and other GE obligations, consisting of 11 Airbus aircraft and 28 spare engines and engine stands, and (b) ten regional jet aircraft currently debt financed by GECC. The proceeds from the sale leaseback transaction of approximately $633 million were used to pay down balances due GE by US Airways Group under the 2003 GE liquidity facility in full, the GECC mortgage-debt financed CRJ aircraft in full, and a portion of the 2001 GE credit facility. The 2001 GE credit facility was amended to allow certain additional borrowings, which resulted in a total principal balance outstanding thereunder of approximately $28 million. The pro forma adjustments reflect the impact of the sale-leaseback transaction as if it occurred on January 1, 2004 and the additional $21 million of borrowings under the GE credit facility that occurred in July 2005.
      Airbus MOU — In connection with the merger, a Memorandum of Understanding was executed between ASVA S.A.R.L., an affiliate of Airbus Industrie, which we refer to as Airbus, US Airways Group, US Airways, Inc. and America West Airlines, Inc. which we refer to as the Airbus MOU. The key aspects of the Airbus MOU are as follows (see also the section entitled “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources”):
  •   Airbus provided a $250 million financing commitment, of which $153 million is available to be drawn upon completion of the merger and used for general corporate purposes.
 
  Airbus has rescheduled US Airways Group’s A320-family and A330-200 delivery commitments and has agreed to provide backstop financing for a substantial number of aircraft, subject to certain terms and conditions, on an order of 20 A350 aircraft. US Airways Group’s A320-family aircraft are now scheduled for delivery in 2009 and 2010. US Airways Group’s A330-200 aircraft are scheduled for delivery in 2009 and 2010 and A350 aircraft deliveries are currently scheduled to occur beginning in 2011. The Airbus MOU also eliminates cancellation penalties on US Airways Group’s orders for the ten A330-200 aircraft, provided that New US Airways Group has met certain predelivery payment obligations under the A350 order. In connection with the restructuring of aircraft firm orders, US Airways Group and America West Holdings will be required to pay an aggregate non-refundable restructuring fee which will be paid by means of set-off against existing equipment purchase deposits of US Airways Group and America West Holdings, Inc. held by Airbus. The US Airways Group restructuring fee is recorded as a reduction in the assets acquired by America West Holdings in purchase accounting. The America West Holdings restructuring fee will be recorded as a charge at the time of the merger, but has been excluded from the pro forma statement of operations as it is a non-recurring item directly related to the merger.
      The pro forma adjustments reflect the initial draw of $153 million immediately available upon closing of the merger, the issuance of certain services credits and the elimination of existing equipment purchase deposits used to satisfy the restructuring fee. The pro forma adjustments also reflect an adjustment to reverse a $33 million accrued aircraft order cancellation penalty previously established by US Airways Group in

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connection with its pre-merger intention not to take delivery of the A330-200 aircraft scheduled for future delivery.
      Restructuring of the ATSB Loan Guarantees — US Airways Group and America West Holdings each had loans outstanding guaranteed under the Air Transportation Safety and System Stabilization Act by the ATSB. As of June 30, 2005, the amounts outstanding under these loans for US Airways Group and America West Holdings were approximately $708 million and $300 million, respectively. US Airways Group reached agreement with the ATSB concerning an interim extension to the ATSB cash collateral agreement. The interim agreement was extended to the earlier of the effective date of the debtors’ plan of reorganization or October 25, 2005 and required US Airways Group, among other conditions, to maintain a weekly minimum unrestricted cash balance which decreased periodically during the term of the extension from $325 million to $200 million. On July 22, 2005, US Airways Group and America West Holdings announced that the ATSB approved the proposed merger. Under the negotiated new loan terms, the US Airways, Inc. ATSB loan will be guaranteed by New US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and will be secured by substantially all of the present and future assets of New US Airways Group not otherwise encumbered, other than certain specified assets, including assets which are subject to other financing agreements. The America West Airlines, Inc. ATSB loan will also be guaranteed by New US Airways Group (including all domestic subsidiaries, with certain limited exceptions) and will be secured by a second lien in the same collateral. The loans will continue to have separate repayment schedules and interest rates; however, the loans are subject to similar repayments and mandatory amortization in the event of additional debt issuances, with certain limited exceptions.
      US Airways, Inc. must pay down the loan principal on the US Airways, Inc. ATSB loan in an amount equal to the greater of (i) the first $125 million of proceeds from specified asset sales identified in connection with its Chapter 11 proceedings, whether completed before or after emergence and (ii) 60% of net proceeds from designated asset sales, provided that any such asset sales proceeds up to $275 million are to be applied in order of maturity, and any such asset sales proceeds in excess of $275 million are to be applied pro rata across all maturities in accordance with the loan’s early amortization provisions. The prior US Airways, Inc. ATSB loan agreement required repayment of 100% of all proceeds from any such asset sales. The guarantee fee on Tranche A of the US Airways, Inc. ATSB loan will be increased to 6.0%, from a current rate of 4.2% (before penalty interest assessed as a result of the current Chapter 11 proceedings). The interest rate on Tranche A will not change. The interest rate on Tranche B will be increased to the greater of the Tranche A interest rate plus 6.0% and LIBOR plus 6.0% from a current rate of LIBOR Plus 4.0% (before penalty interest). The negotiated terms also reschedule amortization payments for US Airways, Inc. with semi-annual payments beginning on September 30, 2007, assuming repayment of proceeds from asset sales of $150 million, and continuing through September 30, 2010. The US Airways, Inc. ATSB loan’s prior final amortization was in October 2009.
      The outstanding principal amount on the America West Airlines, Inc. ATSB loan is $300 million. The guarantee fee on the America West Airlines, Inc. ATSB loan will be 8.0% with annual increases of 5 basis points. The interest rate and scheduled amortization will not change. Voluntary prepayment of the America West Airlines, Inc. ATSB loan will require a premium in certain instances.
      The terms of both amended and restated loans require New US Airways Group to meet certain financial covenants, including minimum cash requirements and required minimum ratios of earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges. The pro forma adjustments reflect the impact of the change in guarantee fee and interest rate as well as the balance sheet reclassification from short-term to long-term debt based on the new loan amortization schedule in place upon completion of the merger. The pro forma financial statements do not reflect any potential pay downs of the loan principal that would be required upon completion of any contemplated asset sales.
      Restructuring of Affinity Credit Card Partner Agreement — In connection with the merger, America West Airlines, Inc., US Airways Group and Juniper Bank, a subsidiary of Barclays PLC, or Juniper, entered into an agreement on August 8, 2005, which we refer to as the amended credit card agreement, amending America West Airlines, Inc.’s co-branded credit card agreement with Juniper, dated January 25, 2005, which we refer to as the original credit card agreement, and assigning the original credit card agreement to

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US Airways Group. Pursuant to the amended credit card agreement, Juniper will offer and market an airline mileage award credit card program to the general public to participate in New US Airways Group’s Dividend Miles program through the use of a co-branded credit card.
      US Airways Group’s credit card program is currently administered by Bank of America, N.A. (USA), or Bank of America, and will terminate approximately two years and three months after the effective date of the merger. During that period both Juniper and Bank of America will run credit card programs for New US Airways Group.
      The amended credit card agreement took effect at the effective time of the merger and the credit card services provided by Juniper under the amended credit card agreement are expected to commence on January 1, 2006, or, if later, the date on which Juniper commences marketing to the general public, and continue until the expiration date, which is the later of December 31, 2012 or seven years from the date on which Juniper commences marketing to the general public.
      Under the amended credit card agreement, Juniper will pay to New US Airways Group fees for each mile awarded to each credit card account administered by Juniper, subject to certain exceptions. Juniper will also pay to New US Airways Group a one-time bonus payment of $130 million, following the effectiveness of the merger, subject to certain conditions including:
  •  funding of $500 million in new equity investments in New US Airways Group;
 
  •  completion of $250 million of exit financing from Airbus, of which approximately $153 million will be funded at the effective time of the merger;
 
  •  commencement of the unwinding of the US Airways Group’s tax trust in the amount of approximately $170 million;
 
  •  completion of the merger;
 
  •  Juniper’s having the sole right to issue credit cards branded with New US Airways Group logos for the term of the agreement, except during an initial period during which Bank of America will have the right to market co-branded credit cards bearing New US Airways Group logos;
 
  •  New US Airways Group’s having $1.1 billion in unrestricted cash, cash equivalents and short term investments, inclusive of the funds to be realized pursuant to the Airbus exit financing and the unwinding of the US Airways Group tax trust described above but exclusive of any payments by Juniper under the amended credit card agreement; and
 
  •  the absence of a material adverse change in the business, financial or other condition of America West Airlines, Inc., US Airways Group or New US Airways Group, or their respective consolidated subsidiaries, taken as a whole.
Juniper will pay an annual bonus of $5 million to New US Airways Group, subject to certain exceptions, for each year after Juniper becomes the exclusive issuer of the co-branded credit card.
      In addition, following the effective time of the merger, Juniper will pre-purchase miles from New US Airways Group for an aggregate of $325 million, subject to the same conditions as apply to the $130 million bonus payment described above. To the extent that these miles are not used by Juniper in connection with the co-branded credit card program, New US Airways Group will repurchase these miles in 12 equal quarterly installments beginning on the fifth year prior to the expiration date until paid in full. New US Airways Group will make monthly interest payments at LIBOR plus 4.75% to Juniper, beginning on the first day of the month following the effective date of the merger, based on the amount of pre-purchased miles that have not been used by Juniper in connection with the co-branded credit card program and have not been repurchased by New US Airways Group. New US Airways Group will be required to repurchase pre-purchased miles under certain reductions in the collateral held under the credit card processing agreement with JPMorgan Chase Bank, N.A.

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      Juniper may, at its option, terminate the amended credit card agreement, make payments to New US Airways Group under the amended credit card agreement in the form of pre-purchased miles rather than cash, or commence the repurchase of the pre-purchased miles before the fifth year prior to the expiration date in the event that New US Airways Group breaches its obligations under the amended credit card agreement, or upon the occurrence of certain events.
      The pro forma adjustments reflect the cash to be received of $455 million for the signing bonus and pre-purchase of miles and the impact of recognizing the revenue from the signing bonus over the life of the agreement.
      Restructuring of Credit Card Processing Agreement — In connection with the merger, America West Airlines, Inc., JPMorgan Chase Bank, N.A., successor-in-interest to JPMorgan Chase Bank, and Chase Merchant Services, L.L.C., entered into the First Amendment to the Merchant Services Bankcard Agreement on August 8, 2005, which we refer to as the amended card processing agreement, amending the Merchant Services Bankcard Agreement between America West Airlines, Inc., JPMorgan Chase Bank and Chase Merchant Services L.L.C., dated April 16, 2003, which we refer to as the original card processing agreement, and assigning the original card processing agreement to America West Airlines, Inc. after the merger. Pursuant to the amended card processing agreement, JPMorgan Chase and Chase Merchant Services, which we refer to together as Chase, will perform authorization, processing and settlement services for sales on Visa and Mastercard for America West Airlines, Inc. and US Airways, Inc. following the merger. The original card processing agreement is guaranteed by America West Holdings and US Airways Group executed a guaranty of the amended card processing agreement on the effective date of the merger.
      US Airways, Inc.’s credit card processing is currently administered by Bank of America, N.A. (USA) and such processing services are expected to be transferred to Chase as soon as possible, but not later than 120 days, after the merger. US Airways, Inc. will become a party to the processing agreement at the time that Chase begins processing for US Airways, Inc.
      The amended card processing agreement took effect at the effective time of the merger and continues until the expiration of the initial term, which is three years from the date the amended card processing agreement takes effect. Upon expiration of the initial term, the amended card processing agreement will automatically renew for successive one-year periods pursuant to the terms of the agreement.
      Under the amended card processing agreement, America West Airlines, Inc. will pay to Chase fees in connection with card processing services such as sales authorization, settlement services and customer service. America West Airlines, Inc. and US Airways, Inc. will also be required to maintain a reserve account to secure Chase’s exposure to outstanding air traffic liability.
      The pro forma adjustments include a reclassification of $201 million of cash to restricted cash.
Items Excluded From the Pro Forma Financial Statements
      The Offering — The pro forma financial statements do not reflect the sale of 8,500,000 shares of new US Airways Group common stock at an assumed public offering price of $17.65 per share, for proceeds totaling $150 million, or up to $172.5 million if the underwriters’ overallotment option is exercised in full, excluding the underwriters’ discount. The underwriters may purchase from New US Airways Group up to an additional 1,275,000 shares at the public offering price, less the underwriters’ discount, within 30 days of the date of this prospectus to cover overallotments. The pro forma financial statements do not include any adjustments for the possible issuance and sale of these shares.
      The New Convertible Notes — New US Airways Group may issue to qualified institutional buyers, in a separate private offering, convertible notes in an aggregate principal amount of up to $125 million, excluding any possible exercise of the overallotment option by the initial purchaser. There can be no assurance that the convertible notes will be issued and, if issued, that they will result in $125 million of proceeds.

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      Integration Activities — The pro forma financial statements do not include any adjustments for liabilities that may result from integration activities, as management is in the process of making these assessments, and estimates of these costs are currently unknown. However, significant liabilities ultimately may be recorded for US Airways Group employee severance and/or relocation costs of vacating some US Airways Group facilities, and costs associated with other exit activities. Any such liabilities would be recorded as an adjustment to the purchase price and an increase in goodwill. In addition, significant restructuring charges may be incurred upon completion of the merger or in subsequent quarters for severance or relocation costs related to America West Holdings employees, costs of vacating some facilities of America West Holdings or other costs associated with exit activities of America West Holdings. Any such restructuring charges would be recorded as an expense in the combined statement of operations in the period in which they were incurred.
      Conversion of America West Holdings’ Convertible Debt — In July and August of 2003, America West Airlines, Inc. completed a private placement of approximately $87 million issue price of 7.25% Senior Exchangeable Notes due 2023. The notes bear cash interest until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing original issue discount daily at a rate of 7.25% per year until maturity. Each note was issued at a price of $343.61 and is exchangeable for class B common stock of America West Holdings at an exchange ratio of 32.038 shares per $1,000 principal amount at maturity of the notes (subject to adjustment in certain circumstances). This represents an equivalent conversion price of approximately $10.73 per share. The aggregate amount due at maturity, including accrued original issue discount from July 31, 2008, will be approximately $253 million. The notes are unconditionally guaranteed on a senior unsecured basis by America West Holdings.
      As a result of the merger, the holders of the notes will have the option to require America West Airlines, Inc. to purchase the notes. Conversely, America West Airlines, Inc. has the option to redeem the notes in either cash or shares of America West Holdings Class B common stock, which then would be converted into New US Airways Group common stock in connection with the merger. If it elects to pay in shares, the number of shares to be issued will be equal to the change of control purchase price divided by 95% of the market price of the America West Holdings Class B common stock at or around the time of the merger.
      The right to convert the notes is at the sole discretion of the holders of the notes. As it is not currently known if the notes will be converted, the pro forma financial statements do not assume conversion. If all of the noteholders elect to require America West Airlines, Inc. to repurchase the notes and if America West Holdings elects to use its common stock to satisfy the repurchase obligation, approximately 5.6 million shares of New US Airways Group common stock would be issued.
      Options to Equity Investors — Each of the equity investors has been granted an option to purchase additional shares of New US Airways Group common stock at $15.00 per share. The right to exercise the options is at the discretion of each investor; therefore, the pro forma financial statements do not reflect the exercise of these options. If all the investors elected to exercise their options to purchase additional shares in full, 7,533,334 shares of New US Airways Group common stock would be issued and approximately $113 million would be raised. In addition, New US Airways Group will make an additional offer to Eastshore, in an amount equal to one-third of the proceeds received from exercise of the options, to repurchase shares of common stock held by Eastshore at a purchase price of $15.00 per share, and Eastshore will have the right, but not the obligation, to accept that offer to repurchase in whole or in part.
      Synergies — America West Holdings and US Airways Group anticipate the combination of America West Holdings and US Airways Group will result in significant annual revenue, operating and cost synergies that would be unachievable without completing the merger. We cannot assure you that we will be able to achieve these revenue, operating and cost synergies and the synergies have not been reflected in the pro forma financial statements. See also the section entitled “New US Airways Group” for further discussion of anticipated synergies.

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2005
(dollars in millions)
                                             
    US Airways   America West   Purchase        
    Group   Holdings   Accounting   Other   Pro Forma
    Historical   Historical   Adjustments   Adjustments   Combined
                     
Current assets
                                       
 
Cash, cash equivalents and short-term investments
  $ 557     $ 322     $     $ 893   (a)   $ 1,772  
 
Restricted cash
    133                         133  
 
Accounts receivable, net
    311       123                   434  
 
Expendable spare parts and supplies, net
    176       51       (50 ) (b)           177  
 
Prepaid expenses and other
    169       198       (5 ) (c)     1   (d)     363  
                               
   
Total current assets
    1,346       694       (55 )     894       2,879  
                               
Property and equipment
                                       
 
Flight equipment
    2,743       931       (630 ) (e)     (8 ) (f)     3,036  
 
Other property and equipment
    366       299       (122 ) (g)           543  
 
Equipment purchase deposits
    72       74             (89 ) (h)     57  
                               
      3,181       1,304       (752 )     (97 )     3,636  
 
Less accumulated depreciation and amortization
    374       620       (519 )  (i)           475  
                               
   
Net property and equipment
    2,807       684       (233 )     (97 )     3,161  
                               
Other assets
                                       
 
Goodwill
    2,490             (1,955 ) (j)           535  
 
Restricted cash
    660       92             201  (a)     953  
 
Other intangibles, net
    517             70  (k)           587  
 
Other assets, net
    82       135        (8 ) (l)           209  
                               
   
Total other assets
    3,749       227       (1,893 )      201       2,284  
                               
Total assets
  $ 7,902     $ 1,605     $ (2,181 )   $ 998     $ 8,324  
                               
Current liabilities
                                       
 
Current maturities of long-term debt and capital leases
  $ 857     $ 119     $ 118  (m)   $ (738 ) (m)   $ 356  
 
Accounts payable
    438       189       122  (n)           749  
 
Air traffic liability
    1,065       266       (164 ) (o)           1,167  
 
Accrued compensation and vacation benefits
    176       47                   223  
 
Other accrued liabilities
    393       152       202   (p)      (q)     747  
                               
   
Total current liabilities
    2,929       773       278       (738 )     3,242  
                               
Non current liabilities and deferred credits
                                       
 
Long-term debt and capital leases, less current maturities
    76       592       1,617  (m)     882  (m)     3,167  
 
Deferred credits and other obligations
    163       155       182  (r)     (106 ) (s)     394  
 
Obligations for prepurchased miles
                      325   (t)     325  
 
Employee benefit liabilities and other
    245             492  (u)           737  
                               
   
Total non-current liabilities and deferred credits
    484       747       2,291       1,101       4,623  
                               
Liabilities subject to compromise
    5,150             (5,150 ) (v)            
Commitments and contingencies
                                       
Stockholders’ equity
                                       
 
Preferred stock
                             
 
Common stock
                      1   (w)     1  
 
Common stock, Class A
    51              (51 ) (x)            
 
Common stock, Class B
    5       1        (6 ) (w)            
 
Additional paid-in capital
    410       633       (621 ) (y)     564  (z)     986  
 
Accumulated deficit
    (1,128 )     (241 )     771  (aa)     70  (aa)     (528 )
 
Treasury stock, Series B Common stock
     (3 )      (308 )     311  (ab)            
 
Deferred compensation
    (7 )           7  (ac)            
 
Accumulated other comprehensive income
    11             (11 ) (ad)            
                               
   
Total stockholders’ equity
    (661 )     85       400       635       459  
                               
Total liabilities and stockholders’ equity
  $ 7,902     $ 1,605     $ (2,181 )   $ 998     $ 8,324  
                               
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Statements
(a) To reflect increases in cash, cash equivalents and short-term investments as described in the table below (dollars in millions):
           
Cash received from new equity investors
  $ 465  
Cash received from an affinity credit card partner
    455  
Initial draw on Airbus loan available at closing
    153  
Cash draws from GECC facilities available prior to closing
    21  
Reclass to restricted cash related to new credit card processing agreement
    (201)  
       
 
Total increase in cash, cash equivalents and short-term investments
  $ 893  
       
(b) Fair market value adjustment of US Airways Group’s expendable spare parts and supplies in purchase accounting.
 
(c) Adjustment to reflect a $2 million decrease in prepaid commissions related to conforming to America West Holdings’ (the accounting acquirer’s) accounting policy for revenue recognition related to tickets that expire unused and a $3 million decrease in prepaid expenses for America West Holdings merger fees.
 
(d) Adjustment to record the services credit to be received in connection with restructure of Airbus purchase agreements.
 
(e) Adjustment to reflect the change in America West Holdings’ method of accounting for aircraft maintenance and repairs of $374 million and the fair market value adjustment of US Airways Group flight equipment and elimination of accumulated depreciation, in purchase accounting of $256 million.
 
(f) Adjustment to reflect the elimination of capitalized interest related to Airbus predelivery deposits of $8 million.
 
(g) Elimination of US Airways Group accumulated depreciation in purchase accounting.
 
(h) Adjustment to reflect the use of Airbus equipment purchase deposits to satisfy restructuring fees in connection with the amended Airbus purchase agreements.
 
(i) Elimination of US Airways Group accumulated depreciation and amortization in purchase accounting of $374 million and adjustment to reflect the elimination of accumulated depreciation and amortization related to the change in America West Holdings’ method of accounting for aircraft maintenance and repairs of $145 million.
 
(j) Adjustment to reflect elimination of prior US Airways Group goodwill of $2.5 billion and the establishment of goodwill as part of purchase accounting of $535 million.
 
(k) Purchase accounting adjustment to reflect US Airways Group take-off and landing slots at fair market value.
 
(l) Adjustment to eliminate debt issuance costs in purchase accounting.
 
(m) Adjustments to reflect changes in debt as summarized in the table below.
                     
    Short-term   Long-term
         
    (dollars in millions)
Purchase accounting adjustments:
               
 
Prepetition debt previously classified as subject to compromise assumed to be a continuing obligation upon emergence from bankruptcy
  $ 118     $ 1,607  
 
Issuance of note to the PBGC to settle US Airways, Inc. claims
          10  
             
   
Total purchase accounting adjustments
  $ 118     $ 1,617  
             
Other adjustments:
               
 
Reclassification of US Airways Group ATSB loan
  $ (708 )   $ 708  
 
Exchange of Eastshore debtor in possession financing for equity
    (100 )      
 
Initial draw on Airbus loan available at closing
          153  
 
Debt restructured under the GE Merger MOU
    70       21  
             
   
Total other adjustments
  $ (738 )   $ 882  
             
(n) Adjustment to reflect an estimated $102 million of prepetition accounts payable previously classified as subject to compromise assumed to be a continuing obligation upon emergence from bankruptcy and the accrual of merger related expenses of $20 million.
 
(o) Adjustment to conform to America West Holdings’ (the accounting acquirer’s) accounting policy for revenue recognition related to tickets that are expected to expire unused and fair value adjustment for US Airways Group deferred revenue.

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(p) Reclassification of prepetition obligations previously classified as subject to compromise assumed to be continuing obligations upon emergence from bankruptcy.
 
(q) Addition of $11 million in liabilities related to the new affinity credit card partner agreement offset by adjustment to reflect the reduction of accrued interest and maintenance contract accruals related to the GECC debt restructuring of $11 million.
 
(r) Adjustments for deferred income taxes related to purchase accounting.
 
(s) Reduction of other non-current liabilities related to restructuring of GE deferred maintenance payment obligations of $70 million, the elimination of Airbus penalties of $33 million and the elimination of the $122 million deferred gain on the GE sale-leaseback transaction, offset by the deferral of $119 million in liabilities related to the new affinity credit card partner agreement.
 
(t) Addition of $325 million in liabilities related to the new affinity credit card partner agreement.
 
(u) Reclassification of prepetition obligations previously classified as subject to compromise assumed to be continuing obligations upon emergence from bankruptcy.
 
(v) Adjustment to reflect the elimination of liabilities subject to compromise upon emergence from bankruptcy.
 
(w) Adjustment to (1) eliminate US Airways Group common stock; (2) convert America West Holdings’ Class B common stock to New US Airways Group common stock; and (3) issue New US Airways Group common stock as part of purchase accounting.
 
(x) Adjustment to reflect the elimination of Class A common stock as part of purchase accounting.
 
(y) Change in additional paid-in capital as summarized below (dollars in millions):
           
Elimination of America West Holdings treasury stock
  $ (307 )
Elimination of existing additional paid-in capital for US Airways Group
    (410 )
Value of additional common stock issued to US Airways Group unsecured creditors
    96  
       
 
Total
  $ (621 )
       
(z) Change in additional paid-in capital reflects value contributed by new equity investors including the exchange of Eastshore debtor in possession financing to equity.
 
(aa) Adjustment to reflect the elimination of US Airways Group accumulated deficit and the impact of other purchase accounting and merger related adjustments.
 
(ab) Adjustment to reflect the elimination of both US Airways Group and America West Holdings’ treasury stock.
 
(ac) Adjustment to reflect the elimination of deferred compensation related to cancelled US Airways Group restricted stock.
 
(ad) Adjustment to reflect the elimination of US Airways Group accumulated other comprehensive income as part of purchase accounting.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
(in millions, except share and per share amounts)
                                             
    US Airways   America West   Purchase        
    Group   Holdings   Accounting   Other   Pro Forma
    Historical   Historical   Adjustments   Adjustments   Combined
                     
Operating revenues:
                                       
   
Passenger
  $ 3,214     $ 1,463     $     $     $ 4,677  
   
Cargo
    46       17                   63  
   
Other
    313       76             11  (a)     400  
                               
   
Total operating revenues
    3,573       1,556             11       5,140  
                               
Operating expenses:
                                       
   
Salaries and related costs
    879       349                   1,228  
   
Aircraft rent
    231       158       4  (b)     21  (c)     414  
   
Other rent and landing fees
    254       87                   341  
   
Aircraft fuel
    824       343                   1,167  
   
Realized and unrealized gains on fuel hedging instruments, net
    (11 )     (69 )                 (80 )
   
Agency commissions
    42       12                   54  
   
Aircraft maintenance materials and repairs
    197       97       25  (d)           319  
   
Depreciation and amortization
    118       23       (3 ) (e)     (10 ) (f)     128  
   
Special charges, net
          1                   1  
   
Express capacity purchases
    430       247                   677  
   
Other
    768       228       (4 ) (g)           992  
                               
   
Total operating expenses
    3,732       1,476       22       11       5,241  
                               
   
Operating income (loss)
    (159 )     80       (22 )           (101 )
                               
Nonoperating income (expenses):
                                       
   
Interest income
    9       4                   13  
   
Interest expense, net
    (159 )     (39 )     5  (h)     13  (i)     (180 )
   
Reorganization items, net
    (28 )           28  (j)            
   
Other, net
    (8 )     2                   (6 )
                               
 
Total nonoperating income (expenses), net
    (186 )     (33 )     33       13       (173 )
                               
Income (loss) before income taxes
    (345 )     47       11       13       (274 )
                               
Income tax benefit
    2                         2  
                               
   
Net income (loss)
  $ (343 )   $ 47     $ 11     $ 13     $ (272 )
                               
Earnings (loss) per share:
                                       
   
Basic
  $ (6.26 )   $ 1.32                     $ (4.56 )(k)
                               
   
Diluted
  $ (6.26 )   $ 0.92                     $ (4.56 )(k)
                               
Shares used for computation (in thousands):
                                       
   
Basic
    54,862       36,015                       59,654  
                               
   
Diluted
    54,862       62,551                       59,654  
                               
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Statements
For the six months ended June 30, 2005:
(a) Reflects the amortization of the signing bonus related to the new affinity credit card agreement over the life of the agreement.
 
(b) Reflects increase in aircraft rent expense related to the fair market value adjustments in purchase accounting related to aircraft leases.
 
(c) Reflects increased aircraft rent expense related to the GECC aircraft sale-leaseback transaction and lease rate restructuring.
 
(d) Reflects America West Holdings’ change in accounting method for aircraft maintenance and repairs.
 
(e) Reflects change in depreciation related to fair market value adjustments in purchase accounting related to flight equipment.
 
(f) Reflects reduction of depreciation expense related to the GECC aircraft sales leaseback transaction.
 
(g) Adjustment to conform to America West Holdings’ accounting policy to defer costs related to unused tickets until the revenue is recognized.
 
(h) Reflects decrease in interest expense related to purchase accounting fair market value adjustments related to debt.
 
(i) Change in interest expense as summarized below (dollars in millions):
         
Restructuring of GECC obligations
  $ 18  
Restructuring of the ATSB loan
    8  
Conversion of debtor in possession financing to equity upon the merger
    2  
New affinity credit card partner agreement
    (10 )
New Airbus debt obligation assumed to be drawn down upon closing of the merger
    (5 )
       
    $ 13  
       
(j) Reflects the elimination of reorganization costs.
 
(k) Basic earnings (loss) per common share gives effect to the number of shares expected to be outstanding as a result of the merger. As a result of the pro forma net loss, no effect has been given to potentially dilutive securities.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
(in millions, except share and per share amounts)
                                           
    US Airways   America West   Purchase        
    Group   Holdings   Accounting   Other   Pro Forma
    Historical   Historical   Adjustments   Adjustments   Combined
                     
Operating revenues:
                                       
 
Passenger
  $ 6,345     $ 2,197     $     $     $ 8,542  
 
Cargo
    132       28                   160  
 
Other
    640       114             21   (a)     775  
                               
 
Total operating revenues
    7,117       2,339             21       9,477  
                               
Operating expenses:
                                       
 
Salaries and related costs
    2,439       656       (5 ) (b)           3,090  
 
Aircraft rent
    449       304       8  (c)     52  (d)     813  
 
Other rent and landing fees
    419       168                   587  
 
Aircraft fuel
    1,099       557                   1,656  
 
Agency commissions
    100       25                   125  
 
Aircraft maintenance materials and repairs
    361       206       54  (e)           621  
 
Depreciation and amortization
    248       54       (6 ) (f)     (17 ) (g)     279  
 
Special credits, net
          (15 )                 (15 )
 
Express capacity purchases
    801                         801  
 
Other
    1,579       428       (7 ) (h)           2,000  
                               
 
Total operating expenses
    7,495       2,383       44       35       9,957  
                               
 
Operating loss
    (378 )     (44 )     (44 )     (14 )     (480 )
                               
Nonoperating income (expenses):
                                       
 
Interest income
    12       8                   20  
 
Interest expense, net
    (242 )     (80 )     8  (i)     (9 ) (j)     (323 )
 
Reorganization items, net
    (35 )           35  (k)            
 
Other, net
    22       27                   49  
                               
 
Total nonoperating income (expenses), net
    (243 )     (45 )     43       (9 )     (254 )
                               
Loss before income taxes
    (621 )     (89 )     (1 )     (23 )     (734 )
                               
Income tax benefit
    10                         10  
                               
 
Net loss
  $ (611 )   $ (89 )   $ (1 )   $ (23 )   $ (724 )
                               
Loss per share:
                                       
 
Basic
  $ (11.19 )   $ (2.47 )                   $ (12.14 )(l)
                               
 
Diluted
  $ (11.19 )   $ (2.47 )                   $ (12.14 )(l)
                               
Shares used for computation (in thousands):
                                       
 
Basic
    54,597       36,026                       59,654  
                               
 
Diluted
    54,597       36,026                       59,654  
                               
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

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Notes to Unaudited Pro Forma Condensed Combined Financial Statements
For the year ended December 31, 2004:
(a)  Reflects the amortization of the signing bonus related to the new affinity credit card agreement over the life of the agreement.
 
(b)  Reduction in salaries and related costs related to the change in US Airways Group accounting for share-based compensation from SFAS No. 123 to APB Opinion No. 25 to conform to accounting policy of America West Holdings.
 
(c)  Reflects increase in aircraft rent expense related to the fair market value adjustments in purchase accounting related to aircraft leases.
 
(d)  Reflects increased aircraft rent expense related to the GECC aircraft sale-leaseback transaction and lease rate restructuring.
 
(e)  Reflects America West Holdings’ change in accounting method for aircraft maintenance and repairs.
(f)  Reflects changes in depreciation and amortization related to fair market value adjustments in purchase accounting related to flight equipment and slots of ($7) million and $1 million, respectively.
(g)  Reflects reduction of depreciation expense related to the GECC aircraft sale-leaseback transaction.
 
(h)  Reflects a reduction in expense for purchase accounting fair market value adjustments related to inventory of $3 million and a $4 million adjustment to conform to the America West Holdings’ policy to defer costs related to unused tickets until the revenue is recognized.
(i)  Reflects decrease in interest expense related to purchase accounting fair market value adjustments related to debt.
 
(j)  Change in interest expense as summarized below (dollars in millions):
         
New affinity credit card partner agreement
  $ (19 )
New Airbus debt obligation assumed to be drawn down upon closing of the merger
    (9 )
Restructuring of the ATSB loan
    (9 )
Restructuring of GECC obligations
    28  
       
    $ (9 )
       
(k)  Reflects the elimination of reorganization costs.
(l)  Basic earnings (loss) per common share gives effect to the number of shares expected to be outstanding as a result of the merger. As a result of the pro forma net loss, no effect has been given to potentially dilutive securities.

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THE MERGER
      The following is a description of the material aspects of the merger. While we believe that the following description covers the material terms of the merger, the description may not contain all of the information that is important to you. We encourage you to read carefully this entire prospectus and the merger agreement and related July 7, 2005 letter agreement amending the merger agreement, which are filed as exhibits to the registration statement of which this prospectus forms a part.
General
      At the effective time and as a result of the merger, (i) each share of America West Holdings Class A common stock was converted into 0.5362 of a share of common stock of New US Airways Group and (ii) each share of America West Holdings Class B common stock was converted into 0.4125 of a share of New US Airways Group common stock, on the terms and subject to the adjustment as provided in the merger agreement and further described below under the section entitled “The Merger Agreement — The Merger Consideration.”
Background of the Merger
      US Airways Group was one of the airlines most affected by the significant reductions in air travel post-September 11, 2001. With its concentration of routes in the eastern United States, US Airways Group’s average stage length, or trip distance, is shorter than those of other major airlines. In the post-September 11, 2001 environment, US Airways Group was more susceptible than other major airlines to competition from surface transportation, such as automobiles and trains. In addition, the increased airport security charges and procedures had a disproportionate impact on short-haul travel, which constitutes a significant portion of flying for US Airways Group’s airline subsidiaries. On August 11, 2002, the debtors filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.
      In connection with the petition, the debtors developed a plan of reorganization that became effective on March 31, 2003. Although the plan included cost reductions, structural changes and revenue initiatives intended to help the company return to profitability, US Airways Group found itself facing two factors not sufficiently anticipated in its forecasts. The first was the decline in domestic passenger unit revenues. This decline was due to the growth of low-cost carriers and the impact of these carriers on the prices other carriers could charge. The second was higher than predicted fuel costs.
      When it became apparent that US Airways Group could not survive under the business plan developed as part of the plan of reorganization, US Airways Group developed a new business plan, which it called its transformation plan. This plan contained a number of initiatives, including significant reductions in labor costs through changes to the company’s collective bargaining agreements. Although US Airways Group hoped to achieve these reductions without the need for new Chapter 11 protection, it could not do so. As a result of recurring losses, declining available cash and the risk of defaults or cross defaults, the debtors filed voluntary petitions for relief under Chapter 11 on September 12, 2004.
      Even before the petitions were filed in 2004, one of the alternatives US Airways Group explored to address its problems and return to profitability was a possible merger with America West Holdings. The management of America West Holdings believed that consolidation in the industry was inevitable, and was interested in the potential benefits of combining the airlines’ complementary east-west route networks. The parties held preliminary discussions about a possible transaction and conducted due diligence during the period from February through July 2004. Ultimately, these discussions ended due to the parties’ view that a number of issues, including those related to labor, pension and benefit costs, made a merger impracticable.
      In December 2004, in anticipation of US Airways Group’s success in significantly restructuring its labor costs, US Airways Group’s investment advisor, The Seabury Group LLC, began considering potential transactions involving the company and other entities. During this period, executives of US Airways Group and America West Holdings discussed the possibility of resuming discussions concerning a business combination transaction. US Airways Group considered the potential benefits that could be achieved from

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joining two airlines with complementary networks and similar labor costs as US Airways Group hoped to lower its labor costs during its Chapter 11 proceedings. In addition, the parties considered that, as part of the plan of reorganization, US Airways Group would have greater flexibility to combine its network with America West Holdings’ network in a more efficient and cost-effective manner than it had prior to filing bankruptcy petitions in 2004.
      The parties remained interested in combining the two companies’ complementary route networks. The parties also believed that, as a result of US Airways Group’s improved cost structure and liquidity following a plan of reorganization, a merger could create the nation’s largest low-cost carrier with better liquidity and more efficient operations than either airline could achieve on its own.
      Beginning in January 2005, US Airways Group and America West Holdings resumed discussions. Both parties conducted due diligence and each management group met separately and together. On January 20, 2005, the board of directors of America West Holdings discussed the renewed merger talks with US Airways Group as part of a strategic overview presentation. In late February 2005, US Airways Group management and its outside financial advisor made a presentation regarding a possible combination with America West Holdings to the Strategy and Finance Committee of US Airways Group’s board of directors.
      During March 2005, due diligence and discussions about the structure of a possible transaction involving the companies and their respective advisors continued. These discussions included analysis of legal structuring issues and financial modeling. As part of the modeling, potential synergies relating to a combination of the two companies were the subject of extensive review. The companies and their advisors also considered labor contract and other integration issues. During the Chapter 11 cases, US Airways Group had entered into new agreements with its labor groups and had obtained significant reductions in pension and retiree benefit costs, with the result that these issues no longer made a merger impracticable.
      On March 4, 2005, there was a meeting of the Governance Committee of the America West Holdings Board of Directors at which the committee was updated on the status of discussions with US Airways Group. On March 10, 2005, the America West Holdings board of directors was updated on the proposed structure of the transaction, ongoing due diligence and discussions with US Airways Group.
      On March 11, 2005, the Strategy and Finance Committee of US Airways Group’s board of directors again met and received a presentation from senior management concerning the status of the potential transaction.
      On March 21, 2005, Seabury and Greenhill & Co., LLC, America West Holdings’ financial advisor, met to discuss the potential economic terms of a possible transaction. Discussions relating to the economic terms continued after this meeting. On March 24, 2005, at a special meeting of the board of directors of America West Holdings, its management presented a description of a proposed structure of the transaction. Also on March 24, 2005, David Bronner, Chairman of US Airways Group’s board of directors, and Bruce Lakefield, US Airways Group’s Chief Executive Officer, met with John Luth of Seabury and Douglas Parker, Chief Executive Officer of America West Holdings to discuss a potential merger.
      On March 30, 2005, there was a further meeting of the Strategy and Finance Committee of US Airways Group’s board of directors. The committee was updated on the proposed structure of the transaction and the status of the diligence effort and discussions with America West Holdings.
      In April 2005, the parties and their advisors participated in active negotiations regarding the merger agreement, including with respect to the consideration to be paid to the holders of America West Holdings Class A and Class B common stock, respectively, in the merger. Beginning in early April, representatives of the two companies and their advisors participated in frequent meetings and teleconferences discussing business and due diligence issues. Topics of negotiation included the exchange ratio for the conversion of shares of America West Holdings’ common stock into shares of US Airways Group, the need to attract additional equity investment and the composition of the combined company’s board of directors after the merger. Also in April, the parties and their advisors made a joint presentation regarding a possible merger to the ATSB. The merger was subject to the approval of the ATSB under the terms of loan guarantees issued to America West Holdings and US Airways, Inc.

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      At the same time, US Airways Group and America West Holdings participated in discussions and negotiations with potential equity investors in the post-merger company. Prior to the announcement of the proposed merger on May 19, 2005, four investors committed to investing in New US Airways Group. Those four investors are Eastshore Aviation, LLC, a company owned by Air Wisconsin Airlines Corporation and its shareholders; ACE Aviation Holdings Inc., the parent corporation of Air Canada; and Par Investment Partners, L.P. and Peninsula Investment Partners, L.P., two private investment firms. Subsequent to the signing of the merger agreement and the announcement of the proposed transaction, the parties commenced discussions with Wellington Management Company, LLP. and Tudor Investment Corp.
      On April 18 and 19, 2005, the board of directors of US Airways Group convened in-person meetings at US Airways Group’s Crystal City headquarters. During that two-day period, the Strategy and Finance Committee met twice, and on both occasions reviewed the status of the potential transaction with America West Holdings. During the second meeting, US Airways Group’s financial advisors reviewed factors relating to valuation of the company, and discussed the potential valuation of the company in combination with America West Holdings. On April 19, 2005, the full board of directors of US Airways Group met and reviewed the potential transaction with America West Holdings.
      On April 19, 2005, an article appeared on the Wall Street Journal’s website speculating that America West Holdings and US Airways Group were involved in discussions regarding a potential merger and it was followed the next day with a lengthy story in the paper’s print edition. Prior media reports contained similar speculation, but not with the level of specificity that appeared in the Wall Street Journal. On April 22, 2005, each of America West Holdings and US Airways Group issued a press release confirming the fact that such discussions were occurring.
      On April 29, 2005, the board of directors of America West Holdings met to discuss the status of discussions. Representatives of management of America West Holdings’ advisors updated the board of directors on the status of negotiations, the terms of the merger agreement and the proposed voting agreement.
      In addition, during the course of these negotiations, TPG Advisors, Inc., acting as a financial advisor to America West Holdings, rendered advice and assistance to America West Holdings, including assistance in negotiating certain governance aspects of the transaction.
      Negotiations over the merger agreement and ongoing due diligence continued into May 2005. Also, negotiations with potential investors continued during this period. Like the merger itself, obtaining new equity financing was a central component of the debtors’ plan of reorganization. The receipt of at least $375 million of new equity investment is a closing condition in the merger agreement.
      Negotiations over the merger agreement entered their final phase in mid-May 2005 and US Airways Group and America West Holdings reached agreement on exchange ratios with respect to the America West Holdings Class A common stock and America West Holdings Class B common stock. Final negotiations with potential investors also were occurring at the same time.
      US Airways Group’s board of directors convened a special meeting on May 18, 2005, to consider approval of the merger agreement and related agreements. After presentations by US Airways Group’s outside legal and financial advisors, the board of directors of US Airways Group approved the merger agreement and related agreements. On May 19, 2005, at a regularly scheduled meeting of the board of directors of America West Holdings, America West Holdings’ management, together with America West Holdings’ legal and financial advisors reviewed the terms of the merger agreement and related agreements. America West Holdings’ legal advisors reviewed with the board its fiduciary duties and the board reviewed materials related to the merger in detail. Greenhill made a financial presentation and delivered its oral opinion, subsequently confirmed in writing, that, as of that date of the opinion and based upon and subject to the limitations and assumptions stated in its opinion, the Class B merger consideration to be received by the holders of Class B common stock of America West Holdings is fair, from a financial point of view, to those stockholders. Following discussions, the board of directors determined that the merger agreement and the merger were fair, from a financial point of view, and in the best interests of America West Holdings and its stockholders and unanimously approved the merger agreement and the merger. Execution of the merger agreement was

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announced after the close of the market on May 19. Also on May 19, US Airways Group and America West Holdings entered into agreements with Eastshore, Par, Peninsula and ACE to purchase common stock of New US Airways Group at a price of $15.00 per share for a total purchase price of $125 million, $100 million, $50 million and $75 million, respectively. These investments were conditioned on the merger becoming effective.
      As a condition to Par’s and Peninsula’s investment agreements, on May 19, 2005, America West Holdings entered into participation agreements, amended on July 7, 2005, with each of Par and Peninsula pursuant to which, Par, and under certain circumstances, Peninsula were entitled to receive an aggregate of 11.2% of any additional pre-investment equity value of US Airways Group in an alternative reorganization or business combination transaction involving the sale of New US Airways Group common stock at a price greater than $15.00 per share. For further detail, see the section entitled “The New Equity Investments — Participation Agreements with Par Investment Partners, L.P. and Peninsula Investment Partners, L.P.”
      On May 20, 2005, the debtors filed a motion in the bankruptcy court seeking approval of a process for dealing with any competing offers for US Airways Group or for providing additional investment into the post-merger company that might arise and also seeking approval of the termination fee provisions of the merger agreement and the investment agreements. On May 31, 2005, the bankruptcy court granted the motion and approved the process for dealing with competing offers, which we refer to as the “bidding procedures.”
      Shortly after execution of the merger agreement, US Airways Group and America West Holdings began negotiating with Wellington Management Company, LLP, a Boston-based investment management firm acting on behalf of a group of potential investors, about an equity investment in the merged company. On May 27, 2005, US Airways Group and America West Holdings entered into an investment agreement with Wellington Management Company, LLP, on behalf of certain funds it manages, for a $150 million equity investment. Like the other new equity investments, Wellington’s investment was conditioned on the merger becoming effective. Because the Wellington investment is at a per share price of $16.50 per share, as opposed to the $15.00 per share price paid by the other new equity investors, the exchange ratios for the America West Holdings Class A and Class B common stock in the merger agreement were amended in accordance with its terms to adjust the exchange ratios for America West Holdings Class A and Class B common stock from 0.5306 and 0.4082 to 0.5362 and 0.4125, respectively, pursuant to a letter agreement dated July 7, 2005 by and among US Airways Group, America West Holdings, Barbell Acquisition Corp., ACE, Par, Peninsula, Wellington and Eastshore. The letter agreement also amended certain provisions of the investment agreements entered into with certain of the new equity investors. Also following execution of the merger agreement, US Airways Group and America West Holdings began negotiating with Tudor Investment Corp., a Connecticut-based asset management firm acting on behalf of a group of potential investors, about an equity investment in the merged company. On July 7, 2005, US Airways Group, America West Holdings, Tudor Proprietary Trading L.L.C. and certain investors for which Tudor Investment Corp. acts as investment advisor, entered into an investment agreement for a $65 million equity investment. Like the other new equity investments, Tudor’s investment was conditioned on the merger becoming effective.
Antitrust
      The merger was subject to review by the Antitrust Division of U.S. Department of Justice, under the Hart-Scott-Rodino Act Antitrust Improvements Act of 1976, or HSR Act. Under the HSR Act, America West Holdings and US Airways Group were required to make pre-merger notification filings and to await the expiration or early termination of the statutory waiting period prior to completing the merger. On May 23, 2005, America West Holdings and US Airways Group each filed a Premerger Notification and Report Form with the Antitrust Division and the FTC. On June 23, 2005, the initial waiting period expired and the Antitrust Division announced it had closed its investigation of the proposed merger without issuing requests for additional information. The Antitrust Division’s announcement cleared the way for the merger to proceed without antitrust challenge by the federal government.
      We cannot assure you that other government agencies, including state attorneys general, or a private party, will not also initiate action to challenge the merger after it is completed. Any such challenge to the

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merger could result in restrictions or conditions that would have a material adverse effect on the combined company. These restrictions and conditions could include operating restrictions, or the divestiture, spin-off or the holding separate of assets or businesses. Under the terms of the merger agreement, each of America West Holdings and US Airways Group, if requested by America West Holdings, are required to commit to any divestitures, licenses or hold separate or similar arrangements with respect to its assets or conduct of business arrangements if that divestiture, license, holding separate or arrangement was a condition to obtain any approval from any governmental entity in order to complete the merger and would not have a material adverse effect on the combined company. No additional stockholder approval is expected to be required or sought for any decision by America West Holdings or US Airways Group, after the America West Holdings special meeting, to agree to any terms and conditions necessary to resolve any regulatory objections to the merger.
      America West Holdings and US Airways Group must also either notify or obtain consent from certain foreign regulatory agencies. US Airways Group, with the consent of America West Holdings, has filed a notification with and obtained approval of the merger from the German Federal Cartel Office or Bundeskartellamt.
      Certain of the equity investors were also required to file notifications under the HSR Act and obtain regulatory approvals. The waiting periods applicable to those equity investors expired on June 27, 2005.
Approvals of the Air Transportation Stabilization Board
      Pursuant to a loan agreement with the ATSB, America West Holdings was required to obtain a waiver from the ATSB of a prepayment obligation to complete the merger. On January 18, 2002, America West Airlines, Inc. closed a $429 million loan supported by a $380 million guarantee provided by the ATSB. America West Holdings fully and unconditionally guaranteed the payment of all principal, premium, interest and other obligations outstanding under the loan partially guaranteed by the ATSB and has pledged the stock of America West Airlines, Inc. to secure its obligations under such guarantee. The loan balance was approximately $300 million as of June 30, 2005. Principal amounts under this loan become due in ten installments of $42.9 million on each March 31 and September 30, commencing on March 31, 2004 and ending on September 30, 2008. Principal amounts outstanding under the loan partially guaranteed by the ATSB bear interest at a rate per annum equal to LIBOR plus 40 basis points plus a guarantee fee of 8% per year.
      The loan partially guaranteed by the ATSB requires that America West Airlines, Inc. maintain a minimum unrestricted cash balance of $100 million. In addition, the government loan contains customary affirmative covenants and the following negative covenants: restrictions on liens, investments, restricted payments, fundamental changes, asset sales and acquisitions, the creation of new subsidiaries, sale and leasebacks, transactions with affiliates, the conduct of business, mergers or consolidations, issuances and dispositions of capital stock of subsidiaries, and amendments to other indebtedness. The loan partially guaranteed by the ATSB contains customary events of default, including payment defaults, cross-defaults, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.
      Subject to certain exceptions, America West Holdings is required to prepay the loan partially guaranteed by the ATSB upon a change in control and may be required to prepay portions of the loan if America West Holdings’ employee compensation costs exceed a certain threshold.
      As part of its reorganization under the prior bankruptcy, US Airways, Inc. also received a $900 million loan guarantee under the Air Transportation Safety and System Stabilization Act from the ATSB in connection with a $1 billion term loan financing that was funded on March 31, 2003. US Airways Group required this loan and related guarantee in order to provide the additional liquidity necessary to carry out its 2003 plan of reorganization. US Airways, Inc. is the primary obligor under the ATSB loan, which is guaranteed by US Airways Group and each of its other domestic subsidiaries. The ATSB loan is secured by substantially all of the present and future assets of the debtors not otherwise encumbered (including certain cash and investment accounts, previously unencumbered aircraft, aircraft engines, spare parts, flight simulators, real property, takeoff and landing slots, ground equipment and accounts receivable), other than certain specified assets, including assets which are subject to other financing agreements. See the section

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entitled “US Airways Group Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for more information about the US Airways, Inc. ATSB loan.
      On July 22, 2005, America West Holdings and US Airways Group announced that the ATSB approved the merger and unanimously voted to (i) approve the request by America West Holdings that the ATSB grant waivers under the loan agreement to America West Airlines, Inc. necessary for America West Holdings to complete the merger, and (ii) approve the corresponding request by US Airways Group that the ATSB consent to the reinstatement of the ATSB-backed term loan made to US Airways, Inc. on terms necessary to effect the merger and the debtors’ plan of reorganization. The ATSB’s approval included new loan terms on both America West Airlines, Inc’s ATSB-backed loan and US Airways, Inc.’s ATSB-backed loan. Upon the completion of the merger, the outstanding principal amount under US Airways, Inc.’s ATSB-backed loan was approximately $708 million, less mandatory prepayments from specified asset sales in connection with the debtors’ plan of reorganization, and the outstanding principal amount under America West Airlines, Inc.’s ATSB-backed loan was approximately $300 million. The agreement with the ATSB provides that the two ATSB-backed loans, which will continue to follow separate repayment schedules and interest rates, will be amended to:
  require certain prepayments from the proceeds of specified asset sales by US Airways Group;
 
  reschedule amortization payments for US Airways, Inc. with semi annual payments beginning on September 30, 2007 and continuing through September 30, 2010 (scheduled amortization payments by America West Airlines, Inc. would not be amended);
 
  revise the mandatory prepayment provisions of both loans to allocate prepayments between US Airways, Inc. and America West Airlines, Inc., conform the prepayment obligations under the two loans, and provide for mandatory prepayments upon certain debt and equity issuances (including issuances of certain convertible notes, secured and unsecured debt, equity and hybrid securities) and sale-leasebacks, asset sales, changes in control and collateral value deficiencies;
 
  require a premium, in certain instances, for voluntary prepayments of America West Airlines, Inc.’s ATSB-backed loan;
 
  revise the interest rate payable on the US Airways, Inc. loan and the guarantee fees payable on the loans;
 
  provide for a first priority lien on all unencumbered assets of the combined companies, subject to certain exceptions, to secure US Airways Inc.’s ATSB-backed loan (subject to an increased amortization requirement if US Airways, Inc. is unable to pledge or grant a perfected lien in its leasehold interest in certain airport facilities);
 
  •   provide for a second priority lien on all unencumbered assets of the combined companies, subject to certain exceptions, to secure America West Airlines, Inc.’s ATSB-backed loan;
 
  •   provide for guarantees of each loan by New US Airways Group and all of its domestic subsidiaries (with certain limited exceptions);
 
  implement certain financial covenants, including minimum cash requirements (as described in more detail below) and required minimum ratios or earnings before interest, taxes, depreciation, amortization and aircraft rent to fixed charges; and
 
  modify the transferability provisions of the loans to allow certain tranches of the loans to be transferred to qualified institutional buyers without the benefit of the ATSB guarantee, provided that interest on a transferred tranche will accrue at the interest rate applicable to such tranche plus the guarantee fee that would otherwise have been payable to the ATSB.
      New US Airways Group will be required to maintain consolidated unrestricted cash and cash equivalents, less: (a) the amount of all outstanding advances by credit card processors and clearing houses in excess of 20% of the air traffic liabilities; (b) $250 million presumed necessary to fund a subsequent tax trust (to the extent not otherwise funded by New US Airways Group or through credit card holdbacks transferable to New

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US Airways Group); (c) $35 million presumed necessary to post collateral to credit card clearing houses (to the extent not posted); and (d) any unrestricted cash or cash equivalents held in unperfected accounts); in an amount not less than:
  $525 million through March 2006;
 
  $500 million through September 2006;
 
  $475 million through March 2007;
 
  $450 million through September 2007;
 
  $400 million through March 2008;
 
  $350 million through September 2008; and
 
  $300 million through September 2010.
      The ATSB’s approvals are conditioned on certain conditions to closing, including negotiation and finalization of certain terms and granting to the ATSB anti-dilution adjustments to be determined by the parties, as a result of this offering by US Airways Group, under the warrants issued by America West Holdings to the ATSB the right to pay the exercise price for the warrants through a dollar-for-dollar discharge of indebtedness under the loan. The ATSB agreed to terminate, upon the effectiveness of the merger, certain restrictions on the transfer of the America West Holdings Class A common stock held by the TPG Entities.
Accounting Treatment
      For accounting purposes only, we will account for the merger as a “reverse acquisition” using the purchase method of accounting in conformity with accounting principles generally accepted in the United States of America. Although the merger is structured such that America West Holdings became our wholly owned subsidiary at closing, America West Holdings will be treated as the acquiring company for accounting purposes in accordance with SFAS No. 141, “Business Combinations.” Because America West Holdings’ stockholders are expected to own approximately 33% of the shares of New US Airways Group after the merger as compared to the former US Airways Group creditors who will own 10%, which assumes the exchange of certain convertible debt and reflects the impact of certain securities that are dilutive at the per share price paid by the equity investors, America West Holdings received a larger number of designees to the New US Airways Group board of directors, and America West Holdings’ Chairman and Chief Executive Officer serves as Chairman and Chief Executive Officer of New US Airways Group, America West Holdings is deemed to be the acquiring company for accounting purposes.
Change of Control Put Option under America West Airlines, Inc.’s 7.25% Senior Exchangeable Notes
      Completion of the merger constituted a “change of control” under America West Airlines, Inc.’s outstanding 7.25% Senior Exchangeable Notes due 2023 and will require America West Airlines, Inc. to make an offer to purchase those notes within 30 days after the effective time of the merger at a purchase price of $343.61 per $1,000 principal amount at maturity. Under the terms of the notes and the related guarantee and exchange agreement, America West Airlines, Inc.’s obligation to purchase those notes may be satisfied at America West Holdings’ election by delivery of shares of New US Airways Group common stock having a “fair market value” of not less than $343.61 per $1,000 principal amount at maturity for a total of $86.8 million plus an additional $1.1 million of accrued but unpaid interest. For this purpose “fair market value” means 95% of the average market price of the New US Airways Group common stock calculated over the 5 business days ending on the third business day before the purchase date.
America West Holdings Warrants
      As compensation for various elements of America West Holdings’ financial restructuring completed in January 2002, America West Holdings issued a warrant to purchase 18.8 million shares of America West Holdings Class B common stock to the ATSB and additional warrants to purchase 3.8 million shares of its

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Class B common stock to other loan participants, in each case at an exercise price of $3 per share and a term of ten years. In the first quarter of 2004 and the third quarter of 2003, approximately 220,000 and 2.6 million warrants, respectively, were exercised at $3 per share. These warrant exercises were cashless transactions resulting in the issuance of approximately 1.6 million shares of America West Holdings Class B common stock. As of the date of this prospectus, warrants to purchase 19.7 million shares of America West Holdings Class B common stock remain outstanding. As a result of the merger, the warrants were converted into the right to receive, upon exercise and payment of the adjusted exercise price, in lieu of America West Holdings Class B common stock, the Class B merger consideration that the holder of such warrants would have received had the warrants been exercised immediately prior to the merger. The ATSB’s approval of the merger was conditioned upon the ATSB being granted anti-dilution adjustments to be determined by the parties as a result of this offering by US Airways Group under the warrants and the right to pay the exercise price for the warrants through a dollar-for-dollar discharge of indebtedness under the loan. For further information regarding the term sheet, see the section entitled “The Merger — Approvals of the Air Transportation Stabilization Board.”

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THE MERGER AGREEMENT
      This section of the prospectus describes certain provisions of the merger agreement. This summary may not contain all of the information that is important to you. You should carefully read this entire prospectus, including the full text of the Agreement and Plan of Merger and the July 7, 2005 letter agreement, both of which are filed as exhibits to the registration statement of which this prospectus forms a part, and the other documents to which we refer you for a more complete understanding of the merger.
Structure of the Merger
      On the effective date of the merger, Barbell Acquisition Corp., a wholly owned subsidiary of US Airways Group newly organized to effect the merger, merged with and into America West Holdings. Through this transaction, America West Holdings became our wholly owned subsidiary.
Post-Merger America West Holdings Governing Documents, Officers and Directors; New US Airways Group Governing Documents and Directors
      America West Holdings Governing Documents. At the effective time of the merger, the certificate of incorporation of Barbell Acquisition Corp. in effect at the effective time of the merger became the certificate of incorporation of America West Holdings and the bylaws of Barbell Acquisition Corp. in effect at the effective time of the merger became the bylaws of America West Holdings, in each case until subsequently amended as provided therein or by applicable laws. However, the certificate of incorporation of America West Holdings was amended at the effective time of the merger to reflect the fact that the corporation’s name is “America West Holdings Corporation.”
      America West Holdings Officers and Directors. The officers of America West Holdings at the effective time of the merger became, from and after the effective time, the officers of post-merger America West Holdings until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with America West Holdings’ certificate of incorporation and bylaws. The chief executive officer of US Airways Group immediately prior to effective time of the merger and the chief executive officer of America West Holdings immediately prior to effective time of the merger, from and after the effective time of the merger, became the directors of post-merger America West Holdings.
      New US Airways Group Governing Documents. At the effective time of the merger, the certificate of incorporation of New US Airways Group was amended and restated in its entirety and the bylaws of New US Airways Group were amended and restated in their entirety, in each case until thereafter amended as provided therein or by applicable laws.
      New US Airways Group Board of Directors. The merger agreement provided that at the effective time of the merger, the board of directors of New US Airways Group would consist of 13 directors composed as follows: (i) two of the directors would be designated by US Airways Group to an initial one-year term, and each of them would be an independent director, (ii) two of the directors would be designated by America West Holdings to an initial one-year term, and each of them would be an independent director, (iii) one of the directors would be designated by US Airways Group to an initial two-year term, and he or she would be an independent director, (iv) three of the directors would be designated by America West Holdings to an initial two-year term, and each of them would be independent directors, (v) one of the directors would be W. Douglas Parker, Chairman and Chief Executive Officer of America West Holdings, who would also serve as Chairman of the Board, and would be appointed to an initial three-year term, (vi) one of the directors would be Bruce Lakefield, President and Chief Executive Officer of US Airways Group and US Airways, Inc., who would also serve as Vice Chairman of the Board, and would be appointed to an initial three-year term and (vii) three of the directors would be nominated by the equity investors to an initial three-year term pursuant to the terms of their financing commitments.

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The Merger Consideration
      US Airways Group Common Stock. At the effective time of the merger, the existing US Airways Group common stock was cancelled and shares of New US Airways Group common stock were issued in accordance with the merger agreement and the investment agreements.
      Conversion of America West Holdings Common Stock. At the effective time of the merger, each share of America West Holdings Class A common stock issued and outstanding immediately prior to the effective time (other than any shares of America West Holdings Class A common stock owned by US Airways Group, America West Holdings or any of their respective subsidiaries, which shares are not beneficially owned by third parties) was converted into the right to receive 0.5362 of a share of New US Airways Group common stock, together with the right, if any, to receive cash in lieu of fractional shares of New US Airways Group common stock. At the effective time of the merger, each share of America West Holdings Class B common stock issued and outstanding immediately prior to the effective time (other than any shares of America West Holdings Class B common stock owned by US Airways Group, America West Holdings or any of their respective subsidiaries, which shares are not beneficially owned by third parties) was converted into the right to receive 0.4125 of a share of New US Airways Group common stock, together with the right, if any, to receive cash in lieu of fractional shares of New US Airways Group common stock. The exchange ratios above reflect the Class A merger consideration and Class B merger consideration as adjusted in accordance with the terms of the July 7, 2005 letter agreement to reflect the increase above $500 million of the pre-investment valuation of US Airways Group as a result of new equity investment by certain investors advised by Wellington at a per share price of $16.50, as opposed to the $15.00 per share paid by the other new equity investors.
      Cancellation of Other America West Holdings Common Stock. At the effective time of the merger, shares of America West Holdings common stock owned by US Airways Group, America West Holdings or any of their respective subsidiaries, except for shares that were beneficially owned by third parties, were cancelled and retired without payment of any consideration therefor and ceased to exist.
      Conversion of Barbell Acquisition Corp. Stock. At the effective time of the merger, each share of common stock of Barbell Acquisition Corp. issued and outstanding immediately prior to the effective time was converted into one share of common stock, par value $0.01 per share, of America West Holdings.
Representations, Warranties and Covenants
      The merger agreement contains customary and substantially reciprocal representations and warranties made by America West Holdings to US Airways Group and Barbell Acquisition Corp. and by US Airways Group and Barbell Acquisition Corp. to America West Holdings.
      The merger agreement contains customary covenants, including, among others, covenants regarding the bankruptcy court proceedings, and solicitation of alternative proposals.

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THE PLAN OF REORGANIZATION
      Under the plan of reorganization developed by the debtors, which was confirmed by the bankruptcy court on September 16, 2005 the following events occurred on the effective date of the plan of reorganization and the merger (percentages below are based on certain assumptions contained in the section entitled “Capitalization” and reflect the impact of certain securities that are dilutive at the per share purchase price paid by the equity investors):
  America West Holdings merged with Barbell Acquisition Corp., which is a wholly owned subsidiary of US Airways Group, and as a result itself became a wholly owned subsidiary of New US Airways Group;
 
  •   The new equity investors ACE Aviation Holdings Inc., or ACE; Par Investment Partners, L.P., or Par; Peninsula Investment Partners, L.P., or Peninsula; the group of investors under the management of Wellington Management Company, LLP, or Wellington; Tudor Proprietary Trading, L.L.C. and certain investors advised by Tudor Investment Corp., or Tudor; and Eastshore Aviation, LLC, or Eastshore; invested $565 million in consideration for the issuance of approximately 36.5 million shares of New US Airways Group common stock, representing approximately 46% of New US Airways Group common stock outstanding as of the completion of the merger, excluding any shares that may be issued pursuant to the options granted to the new equity investors, all of which is more fully described in the section entitled “The New Equity Investments”;
 
  •   The general unsecured creditors, as their claims are allowed, including the Pension Benefit Guaranty Corporation, or the PBGC, and the Air Line Pilots Association, or ALPA, will receive approximately 8.2 million shares of New US Airways Group common stock, representing approximately 10% of New US Airways Group common stock outstanding as of the completion of the merger. In addition, the Air Line Pilots Association will receive options to purchase up to an additional 1.1 million shares of New US Airways Group common stock;
 
  •   Under certain agreements among General Electric and certain affiliates, or GE, and US Airways Group, GE agreed in consideration for the early return of 51 aircraft and six engines, the assumption of certain modified leases and the payment of $125 million in cash by September 30, 2005 or, under certain circumstances, at GE’s election, the issuance of convertible notes in the amount of $125 million, (1) to retire an existing bridge loan facility, (2) to complete a purchase by GE of 21 aircraft and 28 engines with a simultaneous lease back of the equipment to US Airways, Inc. at market rates, (3) to allow US Airways Group to draw additional amounts under an existing credit facility, which will result in a total principal outstanding balance thereunder of approximately $28 million, (4) to restructure lease obligations of US Airways, Inc. relating to 59 aircraft to market rates, (5) to provide financing for current and growth aircraft, (6) to grant concessions regarding return condition obligations with respect to the return of aircraft and engines, and (7) to waive penalties for the removal of engines currently under GE engine maintenance agreements;
 
  •   In consideration of (i) the assumption by US Airways Group of certain purchase agreements between US Airways Group and AVSA, S.A.R.L., an affiliate of Airbus Industrie G.I.E., referred to as Airbus, and (ii) the entry into certain new agreements between US Airways Group, America West Holdings and Airbus, which provide for (1) the purchase by New US Airways Group and America West Holdings of up to 20 new A350 airplanes from Airbus, (2) the ability to convert orders for up to ten of the A350 aircraft to orders for A330 aircraft, (3) the ability to cancel up to ten of the A330 aircraft previously ordered upon the payment of certain predelivery payments for A350 aircraft, and (4) changes in the delivery schedule for existing orders of narrow-body aircraft, Airbus provided New US Airways Group a $250 million line of credit to be used by New US Airways Group, of which $213 million can be used for general corporate purposes, together with additional backstop financing for the purchase of the A350 aircraft; and

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  Affiliates of ACE entered into a series of agreements with New US Airways Group, including maintenance and airport handling agreements.
      In addition, the plan of reorganization provides for the satisfaction of certain secured and unsecured prepetition claims against the debtors. These include claims related to the debtors’ assumption or rejection of various contracts and unexpired leases, the assumption of debtors’ existing collective bargaining agreements with their unions and the termination of certain employee benefit plans with employees and retirees, and other matters. The plan of reorganization also provides for the satisfaction of allowed administrative claims, which consist primarily of the costs and expenses of administration of the Chapter 11 cases, including the costs of operating the debtors’ businesses since filing for bankruptcy. The bankruptcy court set August 22, 2005 as the bar date by which all creditors asserting administrative claims, other than administrative claims arising in the ordinary course of business, were required to be filed. The debtors received a large number of administrative claims in response to this loan date, for timely filed claims as well as additional claims that were late filed without permission of the bankruptcy court. Included in these claims, however, are claims for amounts arising in the ordinary course that have either already been paid, or that are included in the debtors’ business plan and budget to be paid in the ordinary course. Also included are claims that are duplicative, claims for which the debtors believe there is no legal merit for a claim of any status, and claims that the debtors believe may be valid as unsecured claims but are not entitled to administrative claims status. Accordingly, the debtors believe that only a very small portion of the claims filed in response to the bar date for non-ordinary course administrative expense claims will actually be allowed in amounts exceeding the ordinary course expenditures already contained in the debtors’ business plan. However, we cannot assure you that the aggregate amount of the claims ultimately allowed will not be material. To the extent any of these claims are allowed, they will generally be satisfied in full.
      The ultimate resolution of certain of the claims asserted against the debtors in the Chapter 11 cases will be subject to negotiations, elections and bankruptcy court procedures that will occur after the date of this prospectus. While a significant amount of the debtors’ liabilities were extinguished as a result of the discharge granted upon confirmation of the plan of reorganization, not all of the debtors’ liabilities were subject to discharge. The types of obligations that the debtors remain responsible for include those relating to their secured financings, aircraft financings, certain environmental liabilities and the continuing obligations arising under contracts and leases assumed by the debtors, as well as allowed administrative claims.
      On September 14, 2005, US Airways Group, US Airways, Inc., America West Holdings and America West Airlines, Inc. reached agreement with the two ALPA-represented pilot groups at the separate airlines on a comprehensive agreement, the Transition Agreement, that will govern many merger-related aspects of the parties’ relationships until there is a single collective bargaining agreement covering all pilots. Specifically, the Transition Agreement provides for:
  •   Permission for US Airways, Inc. and America West Airlines, Inc. to enter into a reciprocal code-share agreement;
  Continued representation of both pilot groups by ALPA;
  Allocation of aircraft, routes and job opportunities prior to full operational integration;
  •   Support by New US Airways Group for an application that ALPA will file with the National Mediation Board seeking a determination that the two currently separate pilot groups should be combined into one for purposes of collective bargaining;
  Standards and procedures related to integration of the two pilot seniority lists;
  A framework for negotiation of a single collective bargaining agreement covering the two pilot groups;
  A process and time frame for full operational integration;
  •   Agreed-upon provision to be included in bankruptcy court documents, including a profit-sharing plan that provides for profit sharing on 10% of all pretax income up to a 10% pretax income/revenue margin, and 15% of pretax income above the 10% pretax income/revenue margin, and an agreement covering pre-petition grievances filed against US Airways Group and US Airways, Inc.;

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  •   Terms for operation of EMB-190 and CRJ-900 aircraft (these terms must be submitted to the US Airways, Inc. pilot group for ratification before it becomes effective);
  Various provisions related to 401(k) contributions, training pilot matters and resolution of grievances;
  Allocation of liability for merger-related expenses incurred by the pilot groups;
  •   A procedure for resolution of disputes regarding the interpretation or application of the Transition Agreement; and
  Provisions establishing the effective date and duration of the Transition Agreement.

      On September 14, 2005, US Airways Group and US Airways, Inc. entered into Letter of Agreement #95, US Airways Group Equity, or Letter #95, with the pilot group representing pilots of US Airways, Inc. Letter #95 provides that US Airways, Inc. pilots designated by ALPA will receive 1.25 million shares of stock and options to purchase 1.1 million shares of stock of New US Airways Group. ALPA will notify US Airways, Inc. of the pilots designated to receive shares and options no later than sixty days after the effective date of the plan of reorganization. Shares will be issued to those pilots no later than thirty days after ALPA’s notification. The options will be issued according to the following schedule: the first tranche of 500,000 options will be issued on January 31, 2006, a second tranche of 300,000 options will be issued on January 31, 2007, and the third tranche of 300,000 options will be issued on January 31, 2008. The options will have a term of five years from date of issuance. The exercise price for each tranche of options will be the average of the closing price per share of New US Airways Group common stock as reflected on the New York Stock Exchange (or other actively traded national securities exchange on which the common stock is principally traded) for the 20 business day period prior to the applicable options issuance date. Letter #95 also includes provisions restricting transfer of the options and governing anti-dilution.
      In connection with the negotiation of the Transition Agreement and Letter #95, US Airways, Inc. also agreed with ALPA to eliminate an existing 1% pay reduction that would apply to all pilots as a result of a lump sum payment due to pilots recalled from furlough and agreed to pay $500,000 to resolve an outstanding grievance over pay credits for pilots assigned by US Airways, Inc. to traveling to and from certain duty assignments.

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THE NEW EQUITY INVESTMENTS
      This section of the prospectus describes certain provisions material aspects of the investment agreements, as amended by the July 7, 2005 letter agreement. This summary may not contain all of the information that is important to you. You should carefully read this entire prospectus, including the full text of the investment agreements, which are filed as exhibits to the registration statement of which this prospectus is a part, and the text of the July 7, 2005 letter agreement for a more complete understanding of the investments.
Summary of the Investments
      Various equity investors agreed, pursuant to six separate investment agreements entered into with US Airways Group and America West Holdings, to provide $565 million of new cash investments to New US Airways Group in exchange for shares of New US Airways Group common stock. The new investors, and the level of equity investment they agreed to make, are:
  ACE Aviation Holdings Inc. ($75 million of equity investment at a per share purchase price of $15.00), a Canadian holding company that owns Air Canada, Canada’s largest airline with over $7.5 billion in annual revenues;
 
  Eastshore Aviation, LLC ($125 million of equity investment at a per share purchase price of $15.00), which is owned by Air Wisconsin Airlines Corporation and its stockholders and provides regional jet service under a US Airways Express code share arrangement;
 
  Par Investment Partners, L.P. ($100,000,005 of equity investment at a per share purchase price of $15.00), a Boston-based investment firm;
 
  Peninsula Investment Partners, L.P. ($49,999,995 of equity investment at a per share purchase price of $15.00), a Virginia-based investment firm;
 
  a group of investors under the management of Wellington Management Company, LLP, a Boston-based investment firm ($149,999,850 of equity investment at a per share purchase price of $16.50); and
 
  Tudor Proprietary Trading, L.L.C. and a group of investors for which Tudor Investment Corp., a Connecticut-based asset management firm, acts as investment adviser ($65,000,001 of equity investment at a per share price of $16.50).
      We refer to these investors as the equity investors.
Closing of the Investments
      The investment agreements provide that, subject to satisfaction or waiver of the closing conditions contained in each investment agreement, the closing of each investment will occur on the same business day as the effective time of the merger agreement, or on such other date as America West Holdings, US Airways Group and each equity investor may agree. The closing of the investments occurred simultaneously with the closing of the merger on the date of this prospectus. At the closing, each equity investor received shares of New US Airways Group common stock in exchange for their respective equity investment. The equity investors received the following amounts of shares of New US Airways Group common stock:
  ACE Aviation Holdings Inc. received 5,000,000 shares;
 
  Eastshore Aviation, LLC received 8,333,333 shares;
 
  Par Investment Partners, L.P. received 6,768,485 shares, including the shares received pursuant to participation agreements, as more fully described below;
 
  Peninsula Investment Partners, L.P. received 3,333,333 shares;
 
  the group of investors under the management of Wellington Management Company, LLP received a total of 9,090,900 shares; and

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  Tudor Proprietary Trading, L.L.C. and the group of investors for which Tudor Investment Corp. acts as investment adviser received a total of 3,939,394 shares.
      In addition, in connection with the equity investors’ agreement to increase the amount of total new equity that New US Airways Group could raise, New US Airways Group agreed to grant to each equity investor an option that gives the equity investor the right to purchase additional shares of New US Airways Group common stock at $15.00 per share as follows:
  •  ACE Aviation Holdings Inc. has the option to purchase up to an additional 1,000,000 shares;
 
  •  Par Investment Partners, L.P. has the option to purchase up to an additional 3,000,000 shares (which includes the option to purchase 1,666,667 shares that Par Investment Partners, L.P. purchased from Eastshore Aviation, LLC);
 
  •  Peninsula Investment Partners, L.P. has the option to purchase up to an additional 666,667 shares;
 
  •  the group of investors under the management of Wellington Management Company, LLP has the option to purchase up to an additional 2,000,000 shares in the aggregate; and
 
  •  Tudor Proprietary Trading, L.L.C. and the group of investors for which Tudor Investment Corp. acts as investment adviser has the option to purchase up to an additional 866,667 shares in the aggregate;
      Each option is transferable, in whole or in part, among the equity investors. Two-thirds of each option expire on the business day following execution of the purchase agreement between us and the underwriters, with the remainder expiring 15 days later. Upon expiration of the option, New US Airways Group will make an additional offer to Eastshore, in an amount equal to one-third of the proceeds received from exercise of the options, to repurchase shares of common stock held by Eastshore at a purchase price of $15.00 per share, and Eastshore will have the right, but not the obligation, to accept that offer to repurchase in whole or in part for a period of at least 30 days after the receipt of the offer.
Commercial Agreements with ACE Aviation Holdings Inc.
      In connection with ACE Aviation Holdings Inc.’s investment in New US Airways Group, US Airways Group, America West Holdings and ACE Aviation Holdings Inc. or subsidiaries thereof as specified below entered into four separate memoranda of understanding relating to definitive commercial agreements to be entered into on market terms. The parties agreed to work in good faith to negotiate and document the commercial agreements. These memoranda of understanding were as follows:
  A memorandum of understanding among Air Canada Technical Services, or ACTS, America West Airlines, Inc. and US Airways, Inc. in anticipation of definitive agreements under which ACTS will, consistent with prior existing constraints, have the opportunity to provide, for a term of five years, all aircraft engine, aircraft component, and aircraft heavy maintenance for America West Airlines, Inc. and US Airways, Inc. to the extent that it can do so on a competitive basis versus other providers taking into consideration price, terms and conditions. As part of these arrangements, ACTS will have right of first offer with respect to maintenance-related facilities or equipment to be sold by America West Airlines, Inc. and US Airways, Inc. The parties will also enter into an agreement under which ACTS will subcontract with America West Airlines, Inc. and US Airways, Inc. to provide on-call aircraft maintenance services to Air Canada in the United States and America West Airlines, Inc. and US Airways, Inc. will contract with ACTS to provide each of them with on-call aircraft maintenance services in Canada;
 
  A memorandum of understanding among ACE Aviation Holdings Inc., America West Holdings and US Airways Group under which, in the event that the merged entity plans to increase the number of 70 or 90 seat regional jet U.S. — Canada trans-border flights operated as US Airways Express or America West Express, then Air Canada Jazz will have the right, for a period of five years from the date of the closing, to provide those flights using its 70 or 90 seat jet aircraft provided that Jazz is competitive on price, terms and conditions and subject

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  to entry into a definitive agreement thereon comparable to those in effect with carriers operating as US Airways Express or America West Express as well as obtaining necessary regulatory and labor approvals;
 
  A memorandum of understanding among Air Canada, America West Airlines, Inc., and US Airways, Inc. in anticipation of and subject to entry into definitive agreements for five year terms, but not beyond five years from the date of the closing, under which each of America West Airlines, Inc. and US Airways, Inc. may provide certain airport facilities and ground handling services in the United States to Air Canada and under which Air Canada may provide certain ground handling services in Canada to America West Airlines, Inc. and US Airways, Inc.; and
 
  A memorandum of understanding among Air Canada, America West Airlines, Inc., and US Airways, Inc. in anticipation of a definitive agreement under which each will operate flights under the others’ codes, commonly known as a “code share agreement.”

      Execution and delivery of definitive commercial agreements based on the terms described above was a condition to each party’s obligations under the investment agreement with ACE. Definitive commercial agreements were executed at the closing of the merger on the date of this prospectus.
Participation Agreements with Par Investment Partners, L.P. and Peninsula Investment Partners, L.P.
      As a condition to their willingness to enter into investment agreements, America West Holdings entered into participation agreements with each of Par Investment Partners, L.P. and Peninsula Investment Partners, L.P. in connection with the execution and delivery of their respective investment agreements. The participation agreements were amended on July 7, 2005 and have been filed as exhibits to the registration statement of which this prospectus forms a part. The participation agreements, as amended, provided that, unless the merger agreement was terminated by US Airways Group or America West Holdings because America West Holdings entered into a superior alternative business combination transaction, neither Par Investment Partners, L.P. nor Peninsula Investment Partners, L.P. would make, directly or indirectly, any debt or equity investment in US Airways Group or provide, directly or indirectly, equity or debt financing, in either case for the purposes of funding a reorganization, business combination transaction or stand-alone plan of US Airways Group with respect to which America West Holdings was not involved. The amended participation agreements also provided that, subject to certain limitations, in the event America West Holdings was a party to or otherwise involved in an alternative reorganization or business combination transaction involving the sale of New US Airways Group common stock at a price greater than $15.00 per share and the transactions contemplated by the Par and Peninsula investment agreements were not consummated, America West Holdings would cause the merger agreement (or other applicable agreement) or the plan of reorganization to provide that, at the closing of such an alternative transaction, New US Airways Group would issue to Par and Peninsula, shares of New US Airways Group common stock (valuing those shares at $15.00 per share for such purpose) representing an aggregate of 11.2% of the additional pre-investment value of the alternative transaction, less any shares of New US Airways Group common stock previously issued to them pursuant to the equity participation. For purposes of the amended participation agreements, additional pre-investment value means the amount equal to: (A) $15.00, multiplied by (B) (x) the total number of shares of New US Airways Group common stock that would have been issued in the alternative reorganization or business combination transaction had the transaction been made at $15.00 per share minus (y) the total number of shares of New US Airways Group common stock issued in such transaction. Par received 101,818 shares in connection with the participation agreements.
The Stockholders Agreement
      The investment agreements contemplated that, at the closing of the merger, each new equity investor and US Airways Group would enter into a stockholders agreement. The stockholders agreement was executed by each of the new equity investors at the closing of the merger on the date of this prospectus. The stockholders agreement provides that, subject to certain exceptions, each equity investor agrees not to transfer any of the shares of New US Airways Group common stock acquired pursuant to the investment agreements until six

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months following the closing under the investment agreements and that New US Airways Group will provide certain customary registration rights to the equity investors, including certain liquidated damages if we are not able to cause a registration statement to become effective in the agreed upon time period. The stockholders agreement also provides for the appointment of up to three individuals designated by certain of the equity investors to be appointed to the board of directors of New US Airways Group on the date which is two business days after the effective time of the merger for a three-year term. In the case of ACE, the stockholders agreement provides that (i) for so long as ACE holds at least 66.67% of the number of shares of New US Airways Group common stock acquired pursuant to its investment agreement, referred to as the ACE director threshold, ACE will be entitled to designate a director nominee for successive three-year terms and (ii) if ACE falls below the ACE director threshold, ACE will cause its director designee to resign from the board of directors. In the case of the equity investors other than ACE which are entitled as of the effective time of the merger to designate a director to the board of directors of New US Airways Group, the stockholders agreement provides that (i) for so long as that investor holds at least 35% of the number of shares of New US Airways Group common stock acquired pursuant to its investment agreement, referred to as the designating investor threshold, that equity investor will be entitled to designate a director nominee for successive three-year terms and (ii) if any such equity investor falls below the designating director threshold, the designee of that equity investor will serve the remainder of that designee’s term as a director, but that equity investor will no longer have the right to designate a director nominee under the stockholders agreement.
      The form of stockholders agreement is attached as an exhibit to the registration statement of which this prospectus forms a part. This description of the stockholders agreement is qualified in its entirety by reference to the full text of the stockholders agreement.

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DESCRIPTION OF CAPITAL STOCK OF NEW US AIRWAYS GROUP
      The following summary of certain provisions of our common stock is not intended to be complete and is qualified by reference to the provisions of applicable law and to the form of our amended and restated certificate of incorporation and the form of our amended and restated bylaws included as exhibits to this registration statement.
Authorized Capital Stock
      Our authorized capital stock consists of 200 million shares of common stock, par value $0.01 per share.
Voting Rights
      The holders of New US Airways Group common stock are entitled to one vote per share on all matters submitted to a vote of common stockholders, except that voting rights of non-U.S. citizens are limited to the extent that the shares of common stock held by such non-U.S. persons would otherwise be entitled to more than 24.9% of the aggregate votes of all outstanding equity securities of New US Airways Group. Holders of common stock have no right to cumulate their votes. The common stock is listed on the NYSE. Holders of common stock participate equally as to any dividends or distributions on the common stock.
Stock Certificates
      Our bylaws provide that our board of directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock will be uncertificated shares.
Number of Directors
      Our certificate of incorporation provides that our board of directors will consist of not less than one nor more than 15 directors, the exact number of which will be fixed from time to time by resolution adopted by a majority of our board of directors.
Classification of Board of Directors
      Our certificate of incorporation classifies the board of directors into three separate classes, consisting as nearly equal in number as may be possible of one-third of the total number of directors constituting the entire board of directors, with staggered three-year terms. If the number of directors is changed, any increase or decrease will be apportioned across classes in order for the classes to remain as nearly equal as possible.
Removal of Directors
      Our certificate of incorporation provides that any director may be removed only “for cause,” and by the affirmative vote of the holders of at least 80% of the voting power of the then issued and outstanding capital stock entitled to vote for the election of directors.
Vacancies on the Board of Directors
      Our certificate of incorporation provides that, except as may be otherwise provided pursuant to the stockholders agreement or other contracted obligations of New US Airways Group, any vacancy on the board of directors that results from an increase in the number of directors may be filled by a majority of the board of directors then in office, provided that a quorum is present, and any other vacancy occurring on the board of directors may be filled by a majority of the board then in office, even if less than a quorum, or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of that class will hold office for a term that coincides with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors will have the same remaining term as his or her predecessor.

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Foreign Ownership Limitation
      Our certificate of incorporation and bylaws provide limits of the voting and ownership of our equity securities owned or controlled by persons who are not citizens of the United States in order to comply with U.S. law and related rules and regulations of the U.S. Department of Transportation. Any equity securities owned by non-U.S. persons having in excess of 24.9% of the voting power of our outstanding equity securities will have their voting rights automatically suspended in reverse chronological order based upon the date of registration in our foreign stock record. In addition, any attempt to transfer equity securities to a non-U.S. person in excess of 49.9% of our outstanding equity securities will be void and of no effect and will not be recorded in our books and records.
Stockholder Action by Written Consent
      Our certificate of incorporation provides that no stockholder action may be taken except at an annual or special meeting of stockholders and that sto